The Decade (2000-09) and Arriving India

Swaminathan S Anklesaria Aiyar in his weekly column in Sunday Times of India, December 27, 2009 has summarized India’s emergence or arrival.

“In the 2000s, business and knowledge process outsourcing followed the lead of computer software to become globally competitive. India proved that its main advantage lay not in cheap labour but cheap skills. Professor Vivek Wadhwa said Indian companies “have climbed the value chain to become outsourced providers of critical R&D in sophisticated areas such as semiconductor design, aerospace, automotive, network equipment and medical devices. This is happening as multi-nationals set up their own R&D operations in India and partner with local shops. Both the Palm Pre smartphone and the Amazon Kindle, two of the hottest consumer electronics devices on the market, have key components designed in India. Intel designed its sixcore Xeon processor in India. IBM has over 100,000 employees in India. A large number of these are building Big Blue’s most sophisticated software products. Cisco is developing cutting edge networking technologies for futuristic ‘intelligent cities’ in Bangalore. Adobe, Cadence, Oracle, Microsoft and most of the large software companies are developing mainstream products in India.”

“Cheap skills enabled Tata Motors to produce the Nano, the cheapest car in the world. Bharat Forge is set to become the biggest auto forgings company in the world. Reliance has created the largest oil refinery complex in the world at Jamnagar.

Instead of being swallowed by MNCs, Indians went on a global acquisition spree. Tata Steel acquired several foreign plants including Corus, and now gets 65% of its revenue from global operations. Every top pharma company has become a multi-national. Economist Arvind Subramanian says India has beaten China in terms of overseas investment as a percentage of GDP.”

William Dalrymple, the popular writer on India related stories, sees India as follows:

“India is changing but I don’t think India is losing its soul or changing so fast that it’s unrecognizable. You go a few kilometres outside Gurgaon and you can see a bullock cart.” “In soft power, India is way ahead. At all levels, Indian culture is dominant. And the Chinese can’t compete with that at all. China is turning India’s neighbours into its satellites. This is a lesson for India.”

Why can’t India leverage its soft power that can make it noticed and respected? Will India take the lessons? And India must. If China can build the highest speed train in record time, why can’t India complete its rail project to Kashmir Valley even in a decade? When will India learn to plan, design and build some landmark projects?

However, some reports appearing in foreign journals are exciting and hopeful about India. According to ‘Business Week‘, ‘urban consumers in India will likely drive more global business than their Chinese counterparts while India’s rural development far outpaces China’s.’ Domestic consumption accounts for two-thirds of the Indian economy, compared to less than a third of China’s. An approximately 300-million-strong middle class-compared with China’s 100 to 200 million, depending on how one defines “middle class”-is overwhelmingly independent of the government.

Some think,India is closer to catching China than many believe.

Can it happen in the decade that is ahead?

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