India is back

INDIA'S IMPORTANCE. 

The turn of the 21st century has seen great progress in development worldwide, as many developing countries transformed into “dynamic major economies with growing political influence.”

Amongst them is India. Where exactly does this Superpower fit in?

Over the past three decades “India Shine” has been the unofficial slogan of Asia’s third largest economy. It averaged 8% annual GDP (Gross Domestic Produce = market value of all officially recognized final goods and services) in the 5 years preceding the recent global financial crisis. India is today the 11th largest economy in the world. The country’s rapid economic growth was a major contributing factor in the decrease of its poverty rate, with 38% in 2005 to 30% in 2010. This drop represents over 40 million people in the absolute number of the country’s poor.

Internationally,India has gained increasing global recognition as a major economy and political influence. Over the past few years, it has broadened its interests and has placed special attention on cultivating ties with the US, China, Russia and key European countries. India also plays a very important role in emerging markets and other developing countries as it belongs to the BRICS group of nations. India’s growth is important worldwide as it will help both to stabilize the region and ensure that China does not dominate it, since it will take centre stage in the next decades.

India boasts a culture of innovation and entrepreneurship, pioneering the technology and especially the IT services industry. The Indian government has encouraged innovation with programs such as the “India Innovation Growth Programme”, a joint Indo-US initiative. Its partners include Stanford University and Lockhead Martin Corporation. 

The country is most famous for producing entrepreneurs. 

Indian entrepreneurs are creating waves all across the world with businesses making acquisitions abroad and spreading on every continent. Murkesh Ambani is India’s most famous entrepreneur; he belongs to Forbes’s top twenty and his life story is reminiscent of the rags-to-riches story. He built his company from scratch and now runs a multi-billion firm that develops petrochemicals and exploits oil and gas.

India’s potential is immense. Armed with a population strength of more than 1 billion people, the country is tipped to be the world’s first economy by 2050. It benefits from an extremely attractive work force with approximately 500 million people aged between 18-25. It is expected that by 2020 the average age of an Indian will be 29, compared to 37 for China and 48 for Japan.

India already contains 18% of the world’s population and this is immensely appealing for multinational companies. The world’s second most populous country in the world represents a huge market with a potential of almost a billion buyers.

However there are obstacles hindering India’s rise to become the next Superpower and the country has been learning it the hard way.

It faces widespread poverty, with about 25% of the population living under the poverty line. This in turn precipitates other problems such as child labour, criminality and health issues.

India also suffers from poor governance and disorganization. Infrastructures are obsolete and are more of a bottleneck to future economic development than anything else.

Finally comes the country’s social organization. With a diverse mix of communities and religions, India is periodically afflicted by caste disputes and communal clashes. The country would know greater progress in a less caste-driven society.

However, despite these seemingly insurmountable difficulties, India’s future looks bright. If India stays on track, its economy will have surpassed Britain’s by 2040.

So expect to hear a lot about India.

 Alexis PRUDHOMME.