Ratan Tata’s recent revelation that his successor could be a foreigner may have been too much for other Indian businessmen to swallow. Few, after all, are ready to turn their business over to a professional to run, let apart a foreigner. Yet, many of them have begun to appoint foreigners in key leadership positions.

Religare Enterprises, the financial services venture of ex-Ranbaxy promoters Malvinder and Shivinder Singh, has hired old Dresdner, Deutsche Bank and CSFB hand Martin Newson as the head of investment banking. He is based in London and apparently draws a salary higher than CEO & Managing Director Sunil Godhwani. Even the general legal counsel selected by the company is an American gent. The company has global ambitions and therefore wants on board people who have the relevant exposure and domain knowledge. "My job is to get the best person for each job," said Godhwani.

Domain expertise seems to have played a role in Mukesh Ambani hiring Gwyn Sundhagul from Tesco Thailand to run Reliance Retail . Sundhagul will come with four more expats in key positions. Organised retail is still new in India and sufficient expertise is not available locally in key areas like supply chain management, display etc.

Headhunters said the demand for foreigner CEOs is coming from companies that have developed a global footprint and sectors which do not have enough talent in the country -- hospitality, insurance, retail and power, for instance. They are meant to fill a need gap and are not just trophies on display.

Expats can be hired at reasonable prices. Human resource experts said that a foreigner CEO may cost only slightly more than an Indian with similar credentials. Most Indian businessmen want expat Indians first, said K Sudarshan of EMA Partners, a headhunting company. Knowledge of global markets then comes with cultural affinity. "But it is more difficult to convince Indians to come back, unless there is a compelling reason like to stay with old parents," he said.

Also in demand are expats who have spent time in emerging markets like China and East Europe and not just in the US or England.

But it is still early days. Most Indian-owned companies are still run by Indians, though they might have sizeable business abroad. This, experts said, is partly because of better availability of managerial talent in the country than other countries. Dubai, for instance, has become a total expat market for CEOs. Even Indonesia and Malaysia have more expats at leadership positions than India. Ratan Tata could perhaps blaze a new trail.