India Goes Global--Chapter 1

Chapter 1: Opening Its Doors: India's Emergence on the Global Stage

From reading just the first chapter of this book, I can already see many similarities between this book and India Arriving which I read previously. I appreciated some of the repetition because I actually knew what the author was talking about, but at the same time there was new information this author provided. I think by reading India Goes Global I will clearly gain some new information that the other book did not provide, but it will also help fill in some gaps for the information that I "missed" the first time around!

This chapter opened up by discussing India's rapid economic growth. Economic growth has averaged 8% over the past 3 years. Drop in the poverty rate from 41% in 1992-1993 to less than 29% in 2000. Between the years of 1003-2005, India's imports rose by 39% and exports rose by 37%. Intra-industry trade with China is also rising rapidly which is helping plug India into global production networks. From the statistics given, India seems to be on the "up and up." The author states that if India wants to continue to be on the rise for the long term, not just a temporary rise, some things are still going to have to change.

While the service industry is extremely important, it is also important for India to continue to develop the manufacturing sector. This will generate low skilled labor jobs to serve as a ladder out of poverty. In order to do this India must get rid of poor infrastructure, rigid labor laws, and relatively inhospitable business and regulatory environments. India's fiscal deficit and debt remains large. This constrains its ability to act in key areas especially with the government debt above 85% of the Gross Domestic Product. Another problem is that India continues to remain a relatively closed economy. Trade links are weak and India only accounts for 1.5% of the global trade in goods and services. The author states that "If India does succeed in growth as people expect, new and improved Indian firms along with a larger new middle class of several hundred million consumers will enter the global economy. This will provide a major impact on world trade, prices, and growth."