Indians are the world’s number one in the most important global competition in the world: the competition in economic performance.
It will come as a big shock to many Indians to learn that they are the world’s number one in the most important global competition in the world: the competition in economic performance. In the United States, their per capita income now ranks as the highest of any ethnic group: in 2010, Indians earned $37,931 annually, compared to a national average of $26,708.
If India’s population of 1.2 billion could achieve only half of the per capita income of Indian immigrants in the United States, the country’s GDP today would be $24.65 trillion instead of a relatively trifling $1.85 trillion, less than Italy’s. India’s performance in the US arena is not exceptional though. Wherever they go, they have done well.
However, the gap between India’s potential and its actual performance is huge, perhaps the biggest of any country in the world. Sadly, few Indian leaders or policymakers seem to have understood the meaning of this comprehensive global data on the economic competitive abilities of Indians. If they did, India would become the top champion of more rapid globalisation. Instead, even though the evidence shows that Indians could benefit from globalisation’s acceleration, the government continues to put its foot on the brakes whenever globalisation is discussed. To reverse this disastrous pattern of self-destructive behaviour, Indian society should immediately embrace three new attitudes.
Firstly, it should completely change its mindset about the competitiveness of the Indian economy. Instead of seeing it as a weak and defenseless economy about to be ravaged by global competition if trade and other barriers are reduced, it should work on the assumption that Indians in India, like Indians outside, will thrive when faced with open global competition.
Secondly, India should make greater use of one of its richest natural resources: the successful Indian diaspora. The appointment of Raghuram Rajan as the governor of the Reserve Bank of India was a brilliant move. He exudes cultural confidence. This was the man who bravely stood up to all the heavyweight American economic gurus and told them that a major global crisis was about to unfold.
Thirdly, India’s business barons need to drop their ambivalence towards globalisation. This hesitancy is understandable. On the one hand, they realise that they are globally competitive. Many Indian firms have succeeded globally, including Tata, Wipro, and Infosys. On the other hand, they are reluctant to push the Indian government to say ‘yes’ in WTO negotiations because they don’t want to give up their privileged access to the fast growing Indian consumer market. They see no reason why they should share this huge market with others. In adopting this ambivalent attitude, India’s business barons are sacrificing both their own and India’s long-term interests in return for some short-term profits.
The big question remains: can Indian companies become as culturally confident as Indians in America in competing on a globally level playing field? If so, they would become the new champions of globalisation that our world desperately needs.
What’s troubling India?