The annual speeches of the chairman of Reliance tend to be strung with superlatives. Untutored readers might get the impression that he is incurably self-satisfied. What gives a lie to such an impression is the strong sense of tasks undone. Mukesh Ambani achieved two milestones this year. It was the first full year of operation of the Jamnagar refinery, and the first year of commercial gas production from the Krishna-Godavari field. The ownership of the latter is contested by his brother, Anil; but there was no trace of concern on that count in Mr Mukesh Ambani’s speech.

More important is the fact that the government has effectively fenced Reliance out of the domestic market for petroleum products by underpricing middle distillates from its own refineries. That has not inconvenienced Reliance too much; according to its chairman, its profit margin last year was 20 per cent, which would be the envy of most refiners. But he must see the immense difficulty of penetrating the domestic market for petroleum products. He faces a dirty competitor in the government. Despite its enormous size, Reliance had till recently confined itself largely to the domestic market. The government has made this strategy unviable. And the Krishna-Godavari field is still at an early stage of development; it is capable of considerable expansion. So Reliance will have much more oil and gas, and will have to find markets for them. They will have to be converted into products that the government does not offer unfair competition in — principally chemicals and non-vehicular fuels. Reliance is going to have to change its product pattern considerably in coming years.

The theme of Mr Mukesh Ambani’s speech was transformation. Reliance will have to transform itself from a refining to a chemical product company. But if its profitability continues at its normal level, this transformation will not be enough. It will have to grow out of oil and gas into unrelated areas. For long, it has contemplated entering retail, which offers an enormous market and an opportunity for technological transformation. Reliance is not the only company to be attracted to retail; all industrialists who have done well in booming India have thought of it. But none has managed to make an inroad. Small shopkeepers have considerable political clout, and politicians like Mayavati are eager to oblige them. State governments have largely sabotaged the modernization of the retail industry. This suggests that Reliance, which for its entire history has been domestically oriented, will be forced before long to reach out of the country. Mr Mukesh Ambani cannot defeat the big-brother government. There is not enough room in this country to accommodate 19th-century socialist rulers as well as a 21st-century enterprise.