INDIA A GLOBAL ECONOMIC SUPER POWER
New parts of the world that were not long ago considered undeveloped, backwater countries, are now taking center stage in the global economy. Much has been publicized about the ascendance of China's economy, as it has become a major venue for the manufacturing of products sought after by worldwide consumers eager for cheaper goods. However, China's Asian neighbor, India, also has a vigorously growing economy. India's economy is partly being fueled by companies around the world seeking to reduce their costs by outsourcing some of their operations there. A March 9, 2005 article in the International Herald Tribune reported that within 30 years, India is projected to have the world's third largest economy and more people than China. Russell D'Souza, International Credit & Risk Manager for Hallmark International, pointed out that India implemented modern, capitalistic economic reforms in the early 1990s that are producing positive results. The Tribune article reported that Prime Minister Manmohan Singh, who as Finance Minister championed these reforms, proposed major investments in his first budget for education, modernizing India's colonial-era infrastructure, and lowering tariffs. D'Souza also noted India has modernized its banking regulations. "India has liberalized its laws to allow foreign banks to take over branches. Local Indian private banks are allowed to set up foreign bank branches. The banking rules have been liberalized considerably." The CIA World Factbook's website estimates that by July 2005, India's population will be slightly fewer than 1.1 billion, of nearly 16 percent of the world's population, not far behind China's, which is projected to be 1.3 billion. Market Place PRI, a business radio program, reported on March 14, 2005 that a recent economic survey predicted India would grow at 7 percent this year. However, the report went on to assert that many economic analysts say that India needs to improve its infrastructure. D'Souza, who grew up in India but now lives in the U.S, experienced the problems India has with the Lagging state of much of its infrastructure." You've got an infrastructure that is woeful. It's one of India's biggest Achilles heels. It's worse than China's." Just the sheer size of its growing middle class provides a huge potential market for India-based companies. D'Souza said the size of India's middle class is over 200 million people. "Consumer goods are exploding in India. There are people with cash like I've never seen before." India's geopolitical importance and stature are growing too. U.S. foreign policy officials view India, with its strategic location, as an important counter-balance to the growing political and military power of China. U.S. Secretary of State Condoleezza Rice began a six-nation tour of Asia in India on March 16. An article that same day in the Tribune noted that analysts in Delhi viewed her stop there as a positive sign "the United States was eager to underline India's increasing importance on the U.S. foreign policy agenda." Talks between Rice and Singh focused on defense and military cooperation, economy and trade and "synergies in energy and environmental protection." India possesses some advantages that make it especially suited to provide less expensive business services for companies. China, on the other hand, has excelled in the manufacture of cheaper products. The two main advantages for India is that it has an estimated 200 million people who speak English and also a world-class education system. "India is a bilingual country," D'Souza said. He noted this is a byproduct of its former status as a British colony. "It has an advantage over China," he said, in that respect. The educational system in India has produced a significant number of chartered accountants, doctors, MBAs, lawyers, research analysts and other professionals, many of whom will work in India for much less than their professional counterparts in the...
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