India's monopoly moment

**Snigdha Sharma** (0:00)
Why does Indian business look like the way it does? Dwijendra Tripathi spent over two decades at IIM Ahmedabad trying to figure this one question. And his answer, published as the Oxford History of Indian Business, traced it back to centuries. He says that the joint family system gave Indian merchants something that no other institution could. A way to hold capital and risk together within a circle that outsiders could never enter. Think collected capital and their own trusted networks, which in turn gave them the ability to spread their bets across industries when any single one failed. The Birlaus, the Tataas, most family conglomerates that we know in India, built their empires on exactly this logic. And it goes back right to the Mughal era.
Last week, I was going through my own episode archives of Daybreak and I noticed that I had done 3 episodes in a row without realizing that they were all basically about the same thing. Monopolies. One was on FIFA's broadcast ride negotiations that ended with the world's biggest spotting body having nowhere to go in a country of a billion and a half people. Then there was the one about how rival Bollywood studios are selling significant stakes just to stay in the same conversation as Jio Studios. The third was how telecom companies are watching their most valuable infrastructure asset become irrelevant since the day Adani bought the airport buildings that they run through. In fact, the 2024 Barclays Huron report put a number to this.
One family's accumulated wealth equaled one-tenth of everything that India produces in a year. No prizes for guessing which family.
Now, something like this happened in South Korea. Samsung, for example, contributed 13% to the country's GDP in 2024 But it took millions of people in the streets and a president going to prison to even begin asking whether the bargain had gone too far.
In India, we are much earlier in that arc. Which is why I think it is worth looking at whether the countries that ran this model before us have anything useful to tell us. Some of them drew through it, one of them didn't survive it.
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Snigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time.
In 1961, Park Chung-hee took power in South Korea through a military coup. But there was one big immediate problem that he was faced with that military strength alone could not fix. South Korea was, by almost every measure, one of the poorest countries in Asia. So his solution was to pick up a handful of family-run firms and funnel them state capital with one condition attached. Hit the export targets or lose everything that the state had given them.
All the most famous South Korean companies that you know, from Samsung and Hyundai to LG, grew into what they are because a dictator with a development plan decided that they would and made sure that they had no choice but to deliver.
And it worked in a way that still leaves economists scratching their heads.
South Korea went from a per capita income below Ghanas in 1960s, to one of the wealthiest economies in Asia within a single generation.
Princeton political scientist Atul Kohli spent his entire career studying why.
His conclusion was this was because Korea state directed its conglomerates. Basically, the government set the targets and the rewards followed only when the Chables or the family run businesses delivered. The state held the leash and it was very clear that it was willing to use it. The numbers that this model eventually produced are worth sitting with. By 2018, Chables held 77% of Korea's market capital and employed only 12% of its workers. So the companies that owned the most of the economy employed only a fraction of the people in it. In other words, the economy had grown enormously, but the people inside that growth, as workers rather than shareholders, were getting a shrinking share of it.
Indonesia actually ran the same model under Suharto across roughly the same decades. Same logic, pick your conglomerates, protect them and let them do the building. The big difference though was that Indonesia never imposed the kind of discipline that South Korea did. There were no export targets, no performance benchmarks and no credible threat that the state would withdraw support if the conglomerate underperformed. Naturally, these family businesses became over-leveraged. They borrowed far beyond what their underlying businesses could support because they knew that the state would not let them fill.