The importance of India

Dateline 08 March 2006

There will come a time when, for both good and ill, India is America’s most important trading partner. The trade paranoids, who currently rail against China and in the 80s attacked Japan, will see India as the overriding enemy. Businesspeople will see India as their greatest opportunity and their greatest rival.

Bill Clinton waited until his final year in office before getting around to visiting India, and he was the first President in a generation to do so at all. President Bush waited until his second term before visiting the world’s largest democracy. Soon even the much diminished gap of six years between visits to India will seem impossibly complacent. It is probable that future Presidents will regard an Indian visit as a first term priority and, before very long, something that needs to be accomplished in the first year.

India’s economy is now – if you use the most accurate measure, called ‘purchasing power parity’ – the fourth largest in the world, well ahead of Britain, Germany or France, and only a shade behind Japan. Before very long, India will overtake Japan. India’s economy grew at 6.6% last year, slightly down on its long-term average. Japan’s grew at just 1.4% - and even that is an improvement on recent performance.

Of course, India’s wealth per head is very weak by the standards of the developed world. Its population, after all is twice as high as the USA, Japan, Germany, and Britain put together.

Only one country in the world has a larger population than India – China. China’s citizens are also wealthier than India’s, and its economic growth is comparable too. So why do I suggest that India will one day eclipse not just Britain and Japan, but China too, in terms of its trade with the US?

In the long term, it is partly a matter of population. China’s insane and repressive one child policy, which forces abortions on any woman expecting a second child, means that India will, before long, overtake China to become the largest country in the world. Not only that, in a generation’s time, China will have no way to support its massive senior population. By then, China’s population will be falling. Chinese parents prefer sons, so a disproportionate number of the abortions and infanticides are of girls. A much-reduced generation of sons will reach working age and face the twin oppression of massive taxes – to support the seniors – and a severe shortage of women of childbearing age.

In the short term, however, the main reason that India will become more important than China is the English language. India has more English speakers than any other country in the world. English is the language of government, business, and the law, throughout India.

I teach foreign students from all over the world. The Chinese students are often brilliant and hard working. But the quality of their English varies from superb to, frankly, weak. The Indian students I have taught have all been perfectly fluent in English. So, next time you receive a telesales call from someone who claims to ‘be in your area at the moment’, the chances are they are in India.

Copyright © Quentin Langley, 08 March 2006

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