How the west views India: Hindustan Times 27th June 2007

Aerosmith is an ugly rock group which brings out equally disgusting music. They are not known for intelligent talk. But, what was significant when they were interviewed on their visit to India was that they were keen to see the ‘elephants on the roads’. This was quite surprising considering that we are now living in an era where India is considered to be one of the fastest growing economies which has potential for greater things as was predicted by Goldman Sachs sometime back. But, the common man in the west still thinks of India as a land of elephants and snake charmers. Have we really arrived?

We as Indians do tend to think that we are progressing well with malls springing up in every suburb of urban India and large size vehicles blocking the narrow road-infrastructure which cannot keep pace with them, and probably never will. Economic numbers are great to view as they compete with only China. Our GDP growth has been over 9% for sometime now, which is surely impressive. This is notwithstanding the fact that ‘The Economist’ in one of its recent issues feels that growth cannot be sustained without inflation and that loose monetary policy has enabled to a large extent this growth. Industry is booming at a double digit level amidst burgeoning forex reserves. The savings and investment rates are now over 30% and inching closer to the levels which were attained by the East Asian economies prior to the crisis in 1997-98. What more can the critic ask for?

Yet, China is a force while India remains a land of mysticism for many. Mark Tully has remained optimistic about India while both Edward Luce (In Spite of the Gods) and Christopher Kremmer (Inhaling the Mahatma) are vaguely sympathetic to the economic progress but are amused by our leaders and our way of living. What is it that appeals to the west about India?

China has definitely found its way in the lives of the western audience physically through toys, electronics, engineering goods, and even fruits. India’s progress appears to be more peripheral in contrast which has scratched probably only the surface with the IT industry making a mark, and affecting mainly the elitist groups of the west. Foreign investment flows are impressive by our own standards but China still gets in 5 times more funds with ease. The much touted ‘Made in India’ branding is still in its infancy. Despite exports growing to cross $ 125 billion, Indian goods have not really made a decisive impact on the lives of the west. Exports still dominate in the traditional segments like textiles and handicrafts. India remains a poor country in the eyes of the west, which though growing fast still has a large number of starvation deaths and over 250 mn on the precipice of this deprivation. And neither does India rank high in terms of standard of living, bribery index, ease for investment, infrastructure development, fiscal austerity, disease, hunger, human rights etc.

While economic progress may appear to have been exaggerated by us, there is definitely potential for a transformation a la BRICs Report, which expects India to be in the top 5 league by 2050. The vast consuming potential in India keeps interest alive as the western nations; especially USA has looked at Indian markets for expansion. This is more so given the saturation in consumption levels in the west, where Chinese goods are substituting domestic production in all spheres. Given the so called large consuming class in India which is upwardly mobile, the sheer number of 250 mn is a dream to be pursued. What started ostensibly as awarding the Miss Universe titles to Indians, to provide a fillip to their beauty products, has now culminated with the Walmarts making a forceful entry. To top it, the WTO, which is a mouth piece of the US has argued for opening up of the services sector i.e. banking and insurance in particular, which is reinforcing the unequal trade practices that are propounded by all such treaties. Hence, whenever the US looks at the Indian economy, they never fail to point out that we are still closed to foreign investment to the extent that even our own analysts chide successive government for being slow on this score.

Politically, India makes a lot of sense to the west as it is strategically well placed to provide a moral anchor amidst the Islamic militant zones around. Being a democracy is an advantage and even though governance is missing in our political fabric, we still do well in terms of having elections at the centre and state levels – even though we get rogue governments at times. It is no wonder that George Bush has made concessions on the nuclear papers while taking a harder stance against the other recalcitrant nations on this issue.

The politics and economics of India are therefore of interest to the more informed people which would include investment bankers, parliamentarians, and academics. But, for the common man, India will remain the land of mysticism dominated by philosophy and centred on karma, which is the majority way of life, where people find happiness in their squalor and seek solace and salvation in religion. This had brought the likes of George Harrison to India decades back while the likes of Madonna and Richard Gere also put up occasional pretences of being influenced by the cosmic attraction provided by this nation. When will this change?