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India Shining: Rising To Rule The Global Economy

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By Aashu Anshuman:

In a recent speech to schoolchildren in Philadelphia, President of the US, Mr. Barack Obama said that: “When students around the world in Bangalore or Beijing are working harder than ever, and doing better than ever, your success in school is not just going to determine America’s success in the 21st century”. Even under all the hype over Mr. Obama’s trip to India, the point that he made back home in Philadelphia managed to make itself promiscuous again and again.

India is growing at a staggering 8 percent when US can barely manage 2 percent. Nearly half of India’s population is below 25 years of age. Its growth is only highlighted by the fact that India would need an additional 240 million skilled workers by 2030. And with the very steep rise in the purchasing capacity of the average Indian, America is slowly realising that India has come up as a major consumer of its goods. Indians have a craving for nearly everything the US makes: iPods, burgers or fighter planes.

While America and the world in general are coming to terms with the increasing wealth of India and Indians, our country is producing global giants which are taking on the American companies at their own game: Innovation. A 2010 survey on innovation by a consulting group in America came out with some fascinating results. The analysts on the survey panel noted that the number of American companies in the top innovators is decreasing while Indian innovators are on a quick rise to the top. It went as far as saying that the Indian firms place a higher value on innovation than the American companies. Facts only support the findings of this survey. General Electric’s Indian arm has come up with a medical ECG machine for a mere $400. Bharat Biotech sells a single dose of its Hep B vaccine for merely a few rupees. Mobile call rates in India are among the cheapest in the world. And the entire world is talking about Nano.

What is even more surprising is the rate at which Indian industry giants are expanding. Today the Tata group earns 60 percent of its revenues abroad. Companies like Reliance Industries and Piramal Healthcare have been snapping up American brands. But it is not about small acquisitions only. Indian companies are now taking over other giants as well. The formation of Arcelor Mittal and Tata’s acquisition of Corus Steel, despite the several widely publicised disputes, were proof of that.

India has now turned itself into what many people now call the world’s back office. The term is self-explanatory. Now, Indian companies are reading CT Scans, processing legal documents and moving to the sophisticated niche areas as well, like animation. TCS and Infosys now compete directly with the Goliaths of Information Services like IBM and Accenture. Even IBM now employs more people in India than back in the US. Cisco recently decided to place 20 percent of its firm’s leadership in Bangalore where the company has spent $1 Billion on its Globalising Centre East.

As I earlier said, Indian companies are hiring now. Heavily. For decades, the most brilliant of Indian students and entrepreneurs kept shifting to the US. Half of Silicon Valley’s members had Indians as their founders. But the trend is now changing. Indians have actually started returning to their motherland which is seeing an economic boom and is showing little signs of slowing down.

20 years ago, India did not have much to give to the US. The tables have now started turning. Not quite enough to throw America entirely off it, but certainly to make it hold strongly on to India for more than just a little support. India must now consolidate its position on the world stage and use the leverage it has over the US and other countries to make sure that it finds itself a seat in the UN Security Council as a Permanent Member. India must realise that it has taken a leap from being a neglected struggler to fearless hero-of-sorts, where it is in a position to ward of any bullies which lay an eye upon its interests.

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  1. Amar Tejaswi

    A nice article Mr. Anshuman, but I’d like to enumerate my disagreement with your views below:

    1. Innovation in business terms is ‘a strategy that will help beat rivals’. I am not sure which definition of innovation those panelists used but innovation is something that is not exclusive to Indian companies but companies in every country. Companies in developed countries were innovative long before we didn’t know what that word meant. As far as your examples of cheap ECG machine, cheap vaccine and cheap call rates are concerned, they are just products of extreme competition, cheap raw material and labour. I don’t think innovation means cheapness. Even your last example, Nano, is known for its extremely low cost.

    2. You are right in saying Indian industry giants are expanding. Only Indian industry giants like Tata, Birla, and a handful others are expanding. And Arcelor-Mittal is not an Indian company. I suggest you have a look at the Forbes 500 list and count how many Indian companies you can find. Compare that with how many Netherlands has. Last time I checked there were quite a few in the top 10 itself. (Pardon me for not mentioning the numbers)

    3. Yes, India is the world’s back office. But is that something to be proud about? It contradicts your statement about innovation. I have written an article about it right here on YKA; I suggest you read it. Search for The Coin of Information Technology.

    4. Yes, people are starting to come back to India. Economy is, as you said, responsible for it, but only substantially. There are other reasons contributing to it as well. But yes, post-1991, the tide is coming back.

    5. Now this is quite important. I fail to understand why we are so obsessed with a permanent seat in the UNSC. May be it is because people seem to think it is a kind of status symbol that we can flaunt. But are we fit to be a permanent member? Mere economic growth doesn’t make us eligible to be a permanent member. We don’t even have a properly defined foreign policy. China has clearly stated its foreign policy on its website. We haven’t done so because we don’t have one. Does India have the courage to veto sanctions against Iran, a country which always stood by us? Can India at least condemn Israel’s inhuman activities in the Gaza strip? Can India at least speak up against US hegemony? I don’t think so.

    It is easy to lose oneself in rhetoric my friend. The 8% growth rate has let us into a dream state, a dream where we rule the global economy. Let us come back to reality.

    1. Aashu Anshuman

      Thank you for taking out time to post your views in such detail. I really appreciate it. Honestly, I don’t find much to disagree with what you said. I just want to clarify that the article focuses on the changing dynamics of the Indo-US relationship. The idea came after a speech Mr. Obama made at a college in Mumbai. So I felt I should stick to that angle. As you can see I have continuously compared US and India. So the article doesn’t have much to do with how well or badly a another country is doing. Merely about how the balance of power is gradually shifting in the Indo-US relations.

      Your article provided some excellent read.

  2. Amar Tejaswi

    Balance of power. Do you really think it is shifting? Even after recession, when the US was reeling, India wasn’t really on its radar, if you remember. Now with the Obama visit, is this new found love between the two countries? Don’t you think US is using us as an instrument, as an ally, in a world where it finds itself on the opposite side of China? US influence is waning and Chinese rising. It might be deliberate on part of the US to concede a little to us so as to make us believe that we are two countries made for each other. As far the economics are concerned, it is more profitable to set-up camp in countries like India, where everything is cheap. So, do you think our weight on the see-saw is increasing or did the US just consciously loosen its grip?

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Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

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