“China and India will, separately and together, unleash an explosion of demand.”

When Indian businessman Mukesh Ambani thinks of the place where he was born, he believes in the potential of Asia, and of his home country in particular, to improve its reputation in the years to come. Considering the prevailing economic conditions, it would be foolish to doubt that.  Already India is a competitive market and its competitiveness will only grow.

Since 1991, the Indian economy has been significantly deregulated and privatised. This governmental intervention has seen two decades of accelerated economic expansion right up to the present day. Although India’s share of worldwide production is only 2 %, the country has steadily integrated into the global economy and many opportunities exist to integrate even more.

We should remember that measured by income per head which is very low, India is still a developing country with an outdated infrastructure.  Drawbacks such as widespread poverty, unequal income distribution and a global economic crisis only serve to highlight the country’s potential.  Even with these issues, India is already among the world’s ten largest national economies and ranks a strong third in Asia.  A recent Reuters poll showed growth of 6.8 per cent for the financial year ending in March 2012.  Further growth of 7.1 per cent is forecast for 2012-13.

India holds a leading position in the IT and pharmaceutical sectors, and only this week the potential was confirmed by the announcement of a new £20 million telecommunications project between India and the UK.  The project will support research into the development of state-of-the-art applications that will carry audio, video and data.  India has become a knowledge economy, with the technological services sector accounting for 40% of the country’s GDP while employing 25% of its workforce

The reasons behind this success and the hope for the future are simple: each year, India produces more than two million young graduates, the employees and industry leaders of tomorrow. The reputation of India’s educational system continues to grow along with its economy.  Investment in schooling is enormous and collegiate education is highly developed.  The country is able to “export” working power overseas in enviable quantity and quality.

But that’s not the only thing India can provide for overseas trading partners. Additionally, the Indian economy benefits from the export of convenience products, textiles, jewellery, chemicals and an impressive range of raw materials.  Agricultural products such as rice, potatoes, cane and wheat, and dairy produce and fish also add major export value.  In contrast to this, there are is a wide range of products which India imports, notably crude oil, electronic components, gemstones, heavy machinery, chemicals and fertilisers.

India’s vast population speaks more than 100 languages and English, along with Hindi, is one of the two main tongues.  The country has 540 million Hindi speakers but English is the administrative, educational and commercial language, so it’s hardly surprising that the UK is one of the country’s longest established trading partners. Currently the UK only has a 3.2% share of the Indian market.  But if UK business takes the opportunity to share the advantages of importing and exporting to Indian clients, we could extend our influence in the Asian market and build long-lasting relationships.  By making good use of specialist services, achieving successful localisation with marketing translations and website translations, many Wolfestone clients are already taking positive steps towards this.

What does your company think of investing in a country with low foreign debts and booming currency reserves? There are few more suitable targets for trading partnership than India. Don’t you want to be connected with a market that offers a guaranteed explosion in demand in the years to come?  British companies across all sectors are already enjoying the benefits.

Go ahead, it’s your turn!

VANESSA HORN

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  • Paul Chammings

    Vanessa, thank you for this excellent article. I believe you’re correct to focus on education as the key to India’s growth. It’s always interesting to discuss trade growth but it’s equally important to look at underlying reasons for these figures, as you’ve done. About a year and a half ago, a client of mine who sells interactive classroom equipment to the education sector told me that in the same week that UK schools had their technology budgets slashed, the Indian government announced a massive investment programme in technology for their classrooms. Whatever India’s problems, they’ve realised the need to move forward by investing in the next generation.

    David, you should let her write an article every week!

  • Hi Paul

    I couldn’t agree more with your comment about education and also your comment about the piece in general. The research for this article was conducted with an excellent eye for detail and a strong commercial awareness of the “big picture”. You’ll be pleased to hear that there will be more postings from Vanessa over the coming week.

  • Amita Sharma

    It pleases me to see an article focused to India, and it is a good article because you are honest about drawbacks but also correct about potential. As a country we might be getting it wrong before we get it right, but we are getting it right eventually. What you say about education is good because I have seen the good results of Microsoft putting email into Indian schools with the Live@edu project to give students email account access. This is a crucial thing for us. To be moving forward we must focus on technology in schools.

  • Angela Lewis

    I agree with the above comments about education and also agree with the central points you’re making about trade, but I notice that you’ve mentioned India and China being responsible for an explosion of demand “separately and together”. This is certainly true but do you see a potential conflict of interest between these two countries, in terms of trade and/or politics?

  • Vanessa Horn

    Hi Angela

    Thank you for your comment! You’re right with your notion that there are frictions between China and India which make it difficult for the concept of “Chindia” to exist.
    One example of a political conflict of interest is that India is uncomfortable with China supporting Pakistan by delivering technology for construction of nuclear power stations, in what can be seen as a response to India’s importing of nuclear technology from the USA.
    At the moment, China holds an advantage over India due to its reputation as the world export champion and a country that offers higher standard of living. In contrast to this, India’s economy is growing faster than China’s. There you can see where the country has its potential, where it offers value to investors and where its economic power will be found in the future.