India's Economic Growth and Relationship with China
Over the past 35 years since liberalization, India has achieved substantial economic progress but still lags behind China. The two countries could potentially expedite their growth by forming a cooperative relationship, akin to "frenemies," a term originally describing the United States-Soviet Union dynamic.
Technology and Economic Disparities
- The technological, income, and industrial gaps between India and China remain significant.
- Collaboration could enhance both nations' chances of dominating the Asian century.
Influence of Business in International Relations
- Business significantly affects US-China relations, as highlighted in David Shambaugh's book, Breaking the Engagement: How China Won and Lost America.
- Indian businesses have the potential to influence India-China relations similarly.
Enterprise Collaboration
- India should aim for closer ties with China through enterprise collaboration.
- The disparity in economic achievements is not simply due to the political systems in place.
- Recognizing high-performing Indian states and encouraging lagging states to match their success could accelerate growth.
Examples of Regional Growth
- Assam and Tamil Nadu have shown impressive economic growth.
- Tamil Nadu's growth in gross state domestic product increased to 11% last year, achieving a higher per capita income and better human capital than states like Uttar Pradesh.
- The state's manufacturing contribution to GDP is significantly higher than the national average.
Strategies for Accelerated Economic Growth
- Focus on Human Capital: Decentralize the development of human capital to states, allowing more advanced states like Kerala and Tamil Nadu to lead by example.
- Collaborate in Governance: Decentralize economic growth, making states more autonomous and economically advanced.
- Export Strategy: Increase merchandise exports, taking inspiration from successful examples like Apache Footwear in India.
- Technology and Research: Emphasize innovation and research, particularly in fields like AI, clean technology, and pharmaceuticals.
- Strengthen MSMEs: Support the growth of Micro, Small, and Medium Enterprises, drawing lessons from Germany's Mittelstand model.
- Agricultural Engineering: Implement a systematic engineering approach to agriculture to reduce import dependence.
Indian enterprises must prepare for the Asian century, and collaboration with China could enhance this pursuit.
The author's book, CHANAKYA AND SUN TZU: A Business Lens on Trade, Thought, and Travel, co-authored with Nirmala Isaac, explores these themes further.
Disclaimer: These are personal views of the writer and do not reflect the opinions of Business Standard.
