THE long boardroom battle at Tata Iron and Steel (Tisco), India's largest company, has ended with the dismissal of 75-year-old Mr Russi Mody, the chairman, after his refusal to abide by a retirement policy. Mr Ratan Tata, deputy chairman and a member of the founding Tata family, succeeded Mr Mody, with the support of Mr J. R. D Tata, the family's 88-year-old patriarch. The Tisco board, meeting in Mr Mody's absence, dismissed him for allegedly attacking the company in the press. Mr Mody criticised the company after Mr Rata Tata and Mr J. R. D. Tata pressed him to resign against his will after more than 50 years of service. Mr Ratan Tata, the head of Tata, India's largest industrial group, this month completed a deal that would have been unthinkable five years ago: he sold a controlling stake in one of the group's oldest companies - Tata Oil Mills. The younger Tata's disposal of assets highlights the challenge India's large family-based groups face with economic liberalisation. No longer can they hide behind protectionist rules. The panoply of controls, known as the licence-raj, is giving way to an economy in which market forces are being given rein. This is creating opportunities but also exposing Indian companies to competition. The Tata group, with annual sales of US$4.5 billion (HK$34.78 billion) in everything from lorries to luxury hotels, looks well-placed to take advantage of change. Its name is a by-word for commercial integrity; it is strong in steel, cement, power, vehicles and engineering, all industries vital to India's future; its international collaborators include top-flight groups, such as IBM and AT&T of the US and Germany's Daimler-Benz. Yet Tata's success is not assured. The company seems to have lost some of the pioneering spirit it showed before 1970, when it founded India's first steelworks, luxury hotel, airline and large-scale software export business. Other groups have grown faster that Tata's 46 operating companies. Moreover, the group has been torn by the boardroom battle which involved Mr J. R. D. Tata, Mr Ratan Tata, his 55-year-old successor, and Mr Mody.The struggle over the Tata family men's efforts to force Mr Mody to retire, has absorbed the energy of executives for more than a year. A Bombay businessman, a confidant of Tata managers, said: ''It's like the last days of the Roman Empire at Tata. There's a vacuum at the top and there's no one to fill it. The group is drifting.'' Mr Ratan Tata, who took over in 1991 as chairman of Tata Sons, the group's nerve centre, admits the group has lost some of its unity. But he believes it is regaining it. He aims to stamp his authority on the group and focus on markets in which the group has a strong position or can achieve one. Mr Ratan Tata wants the group to invest in new businesses, particularly those based on high technology. But a proposal for a US$1 billion petrochemicals complex at Haldia near Calcutta has been repeatedly delayed. The group has had its successes - notably Titan Watches, a new venture in watchmaking in partnership with Timex of the US. But this is modest compared with projects on the drawing board. The only large project to have gone ahead is the US$1 billion modernisation of Tata Steel. Fortunately for Tata and other domestic groups, the government is giving them time to adjust. Although the licence-raj is being abolished, foreign companies will still face hurdles to entering India.