hellosyam

India no longer second to China

India has moved up the perception ladder. From playing the catching-up game with China to acquiring importance equal to it, India has come a long way.

The World Economic Forum East Asia Summit 2006 started with Asia's growth model, and the accent was clearly on India and China.

What stood out at the session was that both the countries were being discussed in the same breath and not as though one was in a higher league than the other.

All the speakers were unanimous in their belief that India and China had become a force to reckon with in the Asian region.

What reinforced India's growing importance was the huge number of delegates from the country. Around 10 per cent of the 300 delegates at the summit were from India, part of the 'India Everywhere' campaign.

Commerce and Industry Minister Kamal Nath said for India, the new growth model was based on knowledge capital, and the country was moving from business process outsourcing (BPO) to engineering process outsourcing (EPO) and knowledge process outsourcing (KPO).

One of the key questions posed at the Asian growth model session was whether the rise of China and India had changed regional assumptions about the viability of an export-driven growth model.

Nath pointed out that India's economy was domestic market-driven, while China's was export-driven, even in the case of foreign direct investment (FDI).

Demographic trends were in India's favour, with around 60 per cent of the population below 25 years of age, compared to an ageing population in Japan.

Jiang Jianqing, chairman of the board, Industrial and Commercial Bank of China, quickly refuted Nath's statement on China being export-driven by saying that domestic demand had become a major driving force in China and imports to the tune of $660 billion were a manifestation of this. Chinese funds were investing outside the country now, he said.

However, one of the major challenges faced by Asian countries, as Hassan Marican, president and chief executive officer (CEO) of Petronas, pointed out, was the issue of subsidies, especially in the energy sector.

He mentioned India in this context. Nath, who admitted that India still offered a huge subsidy on energy and getting away was a crucial point, corroborated Marican's view.

The writer is in Tokyo at the hospitality of India Brand Equity Foundation

posted by Syam @ 11:12 AM