The 21st Century Fluency Project
Unique opportunity to walk to India last
India 2009 began with uncertainty, not only because of the global financial crisis, but also tensions over the nation's national security following the apparent ease in which terrorists were able to penetrate many of the major focal Mumbai with indifference, arriving by sea, near the Gateway of India, a central point in the city. India remained stoic face events such as the Indian economy remained relatively unaffected by the events worldwide. Unlike China, with an exhibition of about 40 percent of its total economy in providing of world exports, India was less affected. Their relationship more stable internal consumption, and a wealthy middle class - interesting about the same size China at around 300 million people - continued to spend the country out of real danger.
Indian exports to the West account for about 20 percent of its total economy - half the exposure of China - and although the pain caused by the export sector, the government stepped in to help with a massive stimulus plan prosecutor, in any case. This has been largely snapped up by Indian consumers buy cheap car, as the government tries to wean the rural population of India ox and wagon and minivans. "Small is beautiful" in terms of car sales came at the right time for India, Tata Nano could become in an iconic vehicle worldwide. With a car emerging sector in India ready to offer rural employment opportunities in a variety of related industries, Ox converting the car is set to spearhead India's rise as an economic power. The green movement, horrified at the prospect of 10 million Indian driving gasoline-powered vehicles, a slight consolation of a concerted effort to give India LPG engines, unlike China, LPG gas filling stations are becoming a common sight in many service stations.
A mandate for reform
The main event of the year was, of course, general election, which became the first prime minister in India in nearly 40 years. The Congress Party won a majority, in fact, it is the first time in twenty years since India has a government not too impressed by having to trade horses with coalition partners. That era political deadlock that has coincided with China's rise over the same period has ended. India is equipped with a mandate from his people to move forward, and a business friendly government reform and mind in the position, changes in India are precipitated. To demonstrate the level of, and desire for change, India's first tax reforms for 50 years are being pushed through parliament in movements that see an overall reduction in taxes for many. Sectors previously off limits to foreign investors are opening. In fact, my own company is licensed to practice full in May - just three months after the changes in the law that made it possible. Our ability to collect for certain services has been restricted to the last two years of our operations in India. The opening of the market sectors to foreign investors is a growing trend local market as barriers are being demolished in the name of competition and free trade.
India has often been criticized for its lack of infrastructure, and in fact, many of the problems come from India to a lack of investment in many sectors, hampered by lack of political will fermented by a succession of two decades political stagnation. While China has made great strides, India has lagged behind. China Shanghai Port can turn around a ship in terms of cargo and discharge in less than eight hours, while for comparison, in Mumbai it takes three days. national road infrastructure in India - the Golden Quadrilateral, and Corridor NSEW - have not yet been built. vehicles in India need special permits to travel interstate and rarely seen outside their own backyard. However, the lack infrastructure in India has become the opportunity. As China now has high-speed trains and maglev trains, the world's attention is turning India to provide construction, goods and services to raise the national infrastructure in a platform more in line with the 21st century a country of 1.3 billion. As we wrote in the November issue of India Briefing "Investing in public-private partnerships in India" The Indian government will provide financial support foreign investors wishing to participate in rebuilding the nation. It may well prove to be a construction boom, construction and development that can make China's development over the past 20 years pale in comparison. Foreign investors involved in architecture, construction and infrastructure development at all levels should be sending executives to India at this time to evaluate the possibilities. While China is restructuring its base economy, India is ready to accept with gratitude the foreign direct investment in developing the national economy a much-needed infrastructure. Growth of global GDP over the next two decades will be directed by development of India and not China.
A domestic market of China's size
Coupled to that is the opportunity to participate in another major selling opportunity. India, like China, has a huge population and a middle class of approximately the same size. More aligned to Western tastes than the Chinese, and culturally accessible markets in India, also a great opportunity to sell. Not in vain have brands such as Bugatti, with a super car costs $ 500,000, established showrooms in Mumbai. Busy so are the restaurants, bars and social venues meeting. Mumbai today is booming, with queues to get in popular restaurants. Shanghai seems quiet by comparison.
However, India still has an image problem in the West. "Dirty" is a common perception, and other food. Part of this relates to indigenous traditions, which are difficult change. However, regardless of the sacred into a sacred cow that is, it would be prudent to have them wandering in controlled areas and not freely along the roads and the main shopping areas. India needs to adapt some of their cultural habits to make life more attractive and a little less chaotic in appearance. As investors Foreigners have become comfortable with China - a trip to Shanghai is appreciated - A trip to Mumbai may be covered by a different reaction.
Moreover, like China is different, so is India. India has a combination of 35 states and union territories, a number similar to the collection of China's 34 provinces, autonomous, special administrative regions and municipalities. Investors familiar with China will have to learn about India and its diversity of culture. An adaptation to a different culture, coupled with an understanding of the importance of people in the faith of many of India and the diversity of their ethnic origin, near the tribes should be out. While China has in many ways become soft deliberately make it easier to attract foreign direct investment, India is much more demanding. However, the rewards are there.
Infrastructure to drive growth for the next decade
As for the performance of the country in 2009, the government Indian has been, like China, very optimistic about the growth of the economy last twelve months. However, while the smell of manipulation and lack of transparency surrounding China figures, free media and research with government accountability tend to keep the leaders of India's most precise, and even conservative in their statements. Consequently, India's growth of around 7 percent a year seems reasonable and is probably correct. Speaking of growth GDP of around 8 percent for 2010 appears again, and most importantly reasonable and sustainable. India's growth is beginning to be fed by the remodeling its infrastructure and this should be a tendency for ten years, possibly more.
In addition, the Indian rupee, unlike the Chinese RMB, is a traded international currency fully convertible. No political or financial concerns about the handling of the U.S. dollar pegs or any other currency. With less dependence exports to the U.S., India can afford to be separated from other major economies in a way that China can not. Moreover, the current Indian government is headed by a respected economist - Prime Minister Manmohan Singh is a first class honors degree in Economics from Oxford University, has spent five years as minister the country of Finance and is a recognized expert in the global economy. The rest of the top leaders of the Indian government are also a combination of economists and lawyers, it makes sense: economists to balance and promote national growth, balance of payments and reinvest, and attorneys to promote constitutional reform. It is revealing that the boom China in the last twenty years has been led by the Chinese leaders well versed in engineering, and this continues to this day. China's current economic problems and the inseparable nature of their exposure to U.S. exports needs the wisdom of an Indian, Manmohan Singh, whose 1964 book "Export from India Trends and prospects for sustained growth "was an early critic of the trade policy of India. India is therefore unlikely to enter the class of problems China now faces.
Production out of balance with technology
However, there are problems in manufacturing capabilities of India. Whereas China has invested admirably in the education of your workforce semi-skilled and skilled, India has lagged behind. While India's cheap labor, investors will have to spend time in training as was the case in China for fifteen years. This gap between the skills of Indian and Chinese workers will be closed over time, but for now, an economic comparison must be put in place to match the benefits of employment of Chinese workers into higher wages and a more welfare and employment protection against a training indigenous labor, whose wages are lower but they require training. It's an equation that will be increasingly relevant as companies seek to move production from China to India or elsewhere in Southeast Asia.
However, unlike China, India has made significant inroads in its technology and service sectors, which now represents about 55 percent of its GDP. While India needs to reduce this ratio to develop manufacturing to meet the massive infrastructure investments and developments in the country has begun to take on, the nation seems to have IT industry developed a sound basis for the demands of the 21st century. That rules India, and the best and brightest have strong partnerships with schools of I + D in the United States and beyond. Fluency in English is a major driver. This is a very different economic model than China that has been created from the development industry's low-end, and is now struggling to move beyond that in a national level. India already has added value services, and dependence on India on an economic basis is strongly rooted in IT development come to fruition.
Relations with China
In other areas, however, India and China share common interests, particularly on climate change issues in Copenhagen, where they both stood firm as a whole, as well as security, where a common struggle against Islamic extremism is of potential interest to both. A sticking point is the position of India on the Dalai Lama, and the host government Tibetan exile to India, which China considers subversive. Concern about the death of the Dalai Lama - who is 74 and it is rumored that the bad guys - are more likely to impact in China than in India. However, a reincarnation of the Dalai Lama found in Indian territory could create serious diplomatic pressure between the two countries. India also still has flaws in their marriage. The recent debacle on the creation of a new state of Telangana certainly could have been avoided, and they appear to be in the best interests of the Indian Union as a whole. India will need to manage their boundary lines of historical failure if this is not impacting on the development they need.
Looking ahead for India in 2010, expect the economy to rebound and move rapidly towards a sustainable 8 percent to 9 percent annual growth GDP. In this regard, India is almost certain to show faster growth than China has a place in the coming years. Its economy will be driven for infrastructure development and China has been. Exports are also likely to increase and get somewhere in the region of U.S. $ 200billion - relatively small beer compared with China in general, but from a much lower base. The nation is entering a period of growth, the dynamism and prosperity unprecedented since independence, and whether this country can avoid conflict with Pakistan and damaging terrorist attacks of fanatical, the future looks bright. While the nation is very different from China, is in many ways to embark on a similar journey. India will be successful in managing its economy - Which appears to be well much needed reforms can do, and momentum - finally provided the political structure. Investors worldwide must be to evaluate of India as a top priority for the provision of infrastructure and real knowledge, and this will boost the economy of much of the next decade, along with an explosion of domestic purchasing power of India.
Predictions
* Real GDP growth 2010: 8 percent to 9 percent
* The internal security to be tightened on the borders with Pakistan and China
* Some tensions remain with China because of problems with Dalai Lama, but the bilateral trade increase
* International investment opportunities: projects currently massive demand for investment in related infrastructure, as well as consumption expanding domestic market for foreign products at all levels, local purchasing considerations must be applied to the second level of destinations
* Foreign investors will have to look beyond the perceptions of the dirt and poverty
About the Author
This article was written by Chris Devonshire-Ellis for the India business news website, India-Briefing.com. Chris is also the founder of the India and China accountants practice, Dezan Shira & Associates.
Dezan Shira maintains Mumbai, Chennai and Delhi accountants, and also have offices across China.
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