India Shining: Rising To Rule The Global Economy

Posted on November 13, 2010 in Business and Economy

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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