A Lively, indispensable, cutting-edge exploration of our stake in India's gambit to transform itself from a developing country into a global powerhouse in record time.India is everywhere-Indian studios produce animated features and special effects for Hollywood movies; Indian software manages our health records; and Indian customer service centers answer our calls. A country of English speakers and a free-market democracy, with the youngest population on Earth, India is not only the fast-growing market for the next new thing but a source for the technological innovation that will drive the global economy.Yet India is also in a race against time to bring the benefits of the twenty-first century to the 800 million Indians who live on less than $2 per day, and it must do so in a way that is environmentally sustainable and politically viable on a scale never before achieved. If India succeeds, it will not only save itself, it may save us all. If it fails, we will all suffer. As goes India, so goes the world.Like China, Inc., Planet India will capture and catalyze the growing interest in this rising power. With in-depth research, interviews, and provocative analysis, Mira Kamdar offers a penetrating view of India and its cultural and economic impact on the United States and the world. From Bollywood to the Indian diaspora to India's effect on global politics, she reports on the people, companies, and places shaping the new India. Kamdar examines the challenges India faces while celebrating India's tremendous vitality and the opportunities this Asian democracy has to shape its own and all of our destinies.
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About the Author
Kamdar is a Senior Fellow at the World Policy Institute at New School University where her research and writing focus on economic and political transition in India.
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Planet IndiaHow the Fastest Growing Democracy Is Transforming America and the World
By Mira Kamdar
ScribnerCopyright © 2007 Mira Kamdar
All right reserved.
Introduction: Life on Planet India
I remember the last time the world was talking about India. It was a fleeting fashion moment following the Beatles' trip to Rishikesh. Nehru collars and beads came into fashion, along with paisley motifs in psychedelic colors. Transcendental Meditation became the latest fad for stress relief. Laugh-In replaced Leave It to Beaver as the iconic American show. India was suddenly cool. Countercultural types embraced India as the antithesis of the West, lost to the empty materialism of the famous "plastics" scene in the movie The Graduate. India wasn't backward; it was wise and spiritual. But then the West moved on. Plastics prevailed, and India faded into the background.
My Indian father's family lived in Bombay. Every few years, we prepared for the incredible journey to the other side of the world. We collected precious supplies for our relatives in India: jeans and sneakers for our growing cousins, huge jars of Tang, later giant bottles of Tylenol, plastic bags of California-grown almonds and pistachios. Our family mailed us lists, and we stuffed whatever we could into our suitcases.
Living in Bombay in 1967 and 1968, I felt like I had been exiledfrom the real world. My grandparents' flat in Juhu, though surrounded by the homes of Bollywood stars, had no television. Across the main road near the apartment building was a reeking slum. The only relief from the paralyzing heat was to sit under a crazily beating fan. Everything was different: the food, the language, the climate, the rules of what could and couldn't be worn, what could and couldn't be said. There was no privacy. From early morning until late at night, I could hear neighboring housewives banging pots, parents screaming at children, Hindi film songs blasting, and bicyclists ringing their little bells.
In the morning the milkman came around with his cow. My grandmother or one of my aunts brought a brass pot down to him and he squatted next to the cow and sent warm streams of milk into the pot. I learned to keep a keen eye on the milkman to make sure he didn't, via a well-concealed tube, water down the milk. We took the milk upstairs and boiled it. While I sipped hot milk mixed with Ovaltine, I dreamed of dragging my fingers through the condensation on the outside of a tall glass of cold milk.
My aunt and uncle live in Gurgaon now, a booming suburb south of New Delhi. They have two refrigerators and buy pasteurized milk in sealed plastic bags. A huge, flat-screen television with cable brings hundreds of Indian and foreign channels into their living room. They keep in touch with family dispersed around the world via e-mail and telephone. Air conditioners in the bedrooms keep the apartment pleasantly cool. A late-model Honda four-door sedan is parked downstairs.
From the rooftop terrace of my aunt and uncle's flat, I can see buildings going up everywhere, the little tarps of the migrant construction workers dotting vacant lots. Women in full gathered skirts and flowing half-saris, arms covered with bangles up to their shoulders, carry loads of freshly mixed cement in baskets on their heads to the men who transfer the burden onto their own heads before scrambling barefoot up rickety scaffolding to deliver the wet mass. Near the tarps, a child runs crazily next to an old tire he urges forward with a stick. Beyond him, a Citibank office tower rises into view.
On a recent trip to India, I sat in the new Bombay domestic airport waiting for a flight on Kingfisher Airlines, whose slogan is "Fly the Good Times," my laptop propped on my knees. I typed in the code from the card I had just bought from a Tata Indicom kiosk and immediately got a strong wireless connection. On the way to the airport from the old family flat in Juhu, I had passed forlorn groups of destitute families, huddled under an unfinished highway overpass on thin mats of filthy cotton, the little babies naked and snot-nosed. It was the kind of scene that profoundly shocks first-time visitors to India and to which I have never become immune.
As I checked my e-mail in the gleaming terminal among the Indian and foreign businessmen and families waiting for one of the many flights departing for every part of the country, I thought about the India I lived in forty years ago and India today, and I wondered where India would be forty years from now.
"'Where are we headed with our billions?' That is the question India is asking itself," a friend told me in New Delhi over a drink. It is a question the entire world should be asking.
Half my family is Indian. During most of my lifetime, India changed, but did so almost imperceptibly. Then, suddenly, the changes began to come with dizzying speed. With each arrival, I felt I was watching time-lapse photography. No democracy in history has undergone a transformation of India's magnitude or velocity.
Traveling the length and breadth of the country, I witnessed the churning of India's incredible metamorphosis. I interviewed hundreds of people who shared their visions of India's future, most utopian, some grim, with me. I talked to the people in the culture industries who are reimagining India's ancient stories for a new global audience. I met businessmen who are dedicated to including the poor in India's booming economy, even as they take their companies global. I listened to household servants, taxi drivers, farmers, and street vendors talk about their daily struggles, their frustrations, their faith that their children's lives would be better. Everywhere, I was stunned by the pride, the bullishness, the sense that this moment belongs to India. I caught a glimpse of India's future, its possibilities and its perils, and in that future I saw our own, for as goes India, so goes the world.
The World in Microcosm
No other country matters more to the future of our planet than India. There is no challenge we face, no opportunity we covet where India does not have critical relevance. From combating global terror to finding cures for dangerous pandemics, from dealing with the energy crisis to averting the worst scenarios of global warming, from rebalancing stark global inequalities to spurring the vital innovation needed to create jobs and improve lives -- India is now a pivotal player. The world is undergoing a process of profound recalibration in which the rise of Asia is the most important factor. India holds the key to this new world.
India is at once an ancient Asian civilization, a modern nation grounded in Enlightenment values and democratic institutions, and a rising twenty-first-century power. With a population of 1.2 billion, India is the world's largest democracy. It is an open, vibrant society. India's diverse population includes Hindus, Muslims, Sikhs, Christians, Buddhists, Jains, Zoroastrians, Jews, and animists. There are twenty-two official languages in India. Three hundred fifty million Indians speak English.
India is the world in microcosm. Its geography encompasses every climate, from the snowcapped Himalayas to palm-fringed beaches to deserts where nomads and camels roam. A developing country, India is divided among a tiny affluent minority, a rising middle class, and 800 million people who live on less than $2 per day. India faces all the critical problems of our time -- extreme social inequality, employment insecurity, a growing energy crisis, severe water shortages, a degraded environment, global warming, a galloping HIV/AIDS epidemic, terrorist attacks -- on a scale that defies the imagination.
India's goal is breathtaking in scope: transform a developing country of more than 1 billion people into a developed nation and global leader by 2020, and do this as a democracy in an era of resource scarcity and environmental degradation. The world has to cheer India on. If India fails, there is a real risk that our world will become hostage to political chaos, war over dwindling resources, a poisoned environment, and galloping disease. Wealthy enclaves will employ private companies to supply their needs and private militias to protect them from the poor massing at their gates. But, if India succeeds, it will demonstrate that it is possible to lift hundreds of millions of people out of poverty. It will prove that multiethnic, multireligious democracy is not a luxury for rich societies. It will show us how to save our environment, and how to manage in a fractious, multipolar world. India's gambit is truly the venture of the century.
In Search of a New Paradigm
"Our biggest challenge is the challenge nobody has solved in the world: how to grow equity," Mukesh Ambani, chairman of Reliance Industry, India's biggest company, told me. Can liberal democracies forge a global market economy that is environmentally sustainable and reduces inequality? The United States has failed to achieve this. While it has proven its capacity to generate vast wealth, the so-called Washington consensus has advanced corporate interests over the welfare of average citizens and small businesses, exacerbated gaps between the affluent and the poor, and operated with stunning disregard for the environment. America's prosperity is dependent on overconsumption of the world's resources -- with just 6 percent of the world's population, the United States consumes 30 percent of the earth's resources. And it produces a disproportionate share -- 25 percent -- of dangerous greenhouse gases.
American technological, economic, and strategic dominance is being challenged for the first time since the fall of the Soviet Union. Ironically, the communication and information technologies that propelled America to the forefront during the 1990s are now contributing to the erosion of American dominance. These technologies have created a world where time and space are compressed as never before, where ideas, money, services, and people are constantly in motion, freed from the constraints of national boundaries.
The process of globalization spurred by these technological innovations has created what the economist Amartya Sen calls "an age of great affluence," where billions of dollars are amassed by a few while billions of people barely get by. With China's rapid rise, on the one hand, and new terrorist threats on the other, one of the truly pressing questions of our time is whether liberal democracies can deliver to all citizens, including the poor, the freedom to realize their human potential.
The irrepressible optimism of America, its conviction that life can only get better, has dimmed beneath the grim shadow of its war on terror, the debacle in Iraq, and a shifting global economy. According to the Pew Global Attitudes survey, world opinion of the United States is at a historical low. Even in India, where the United States continued to be held in dizzyingly high regard long after it had tumbled elsewhere, positive opinion dropped dramatically from 71 percent approval in 2003 to 56 percent in 2006. Americans themselves feel less secure and less confident about their future.
India and China realize they cannot blindly imitate the American model: the earth simply cannot sustain billions of people consuming finite resources at American levels, nor churning out pollutants at the rate Americans do. The vast majority of the world's people cannot afford to pay the prices Americans are asked to pay for the foundation of a decent life: quality health care and education. Already beset by extreme inequality and dire environmental and health crises, neither India nor China can allow a small portion of their populations to live an American lifestyle.
Europe has achieved a better balance between affluence and equity, committing important resources to universal health care, affordable housing, unemployment, and other benefits for average citizens. The European Union has emerged as the world's first supranational political and economic entity, putting centuries of national enmity and the terrible legacy of two world wars in the twentieth century firmly behind it. But Europe is also struggling with high unemployment and the challenge of integrating growing populations of Muslim immigrants.
Under the regime of Vladimir Putin, Russia has squashed opposition voices and moved away from the open society it embraced after the breakup of the Soviet Union. Japan is much too culturally homogeneous to serve as a model for the rest of the world, and it has recently moved toward the far-right end of the political spectrum with calls for a renewed full-fledged military and national education that glosses over Japan's wartime behavior. China's sheer size ensures that it will have a great impact on the world order as its economy grows, but China's system sits uncomfortably with those nations that value democracy, freedom of expression, and a vibrant press.
India, with its open society, dynamic economy, its commitment to democratizing the institutions of world order and to creating wealth in a way that is inclusive and sustainable, is forging a compelling alternative paradigm.
The Asian Century
"India and China can together reshape the world order," said Prime Minister Singh to Chinese premier Wen Jiabao when he visited New Delhi in 2005. Between them, India and China account for 2.4 billion people -- one-third of humanity. India is the second-fastest-growing economy after China, posting an annual growth rate of 8 percent in 2006, with the ambition to sustain growth of 9 to 10 percent during the next five years and beyond. India, like China, has embraced a market economy and moved to reap the benefits of globalization. Both India and China see this moment as a historic turning point where the future is gravitating toward Asia. They see the twenty-first century as the Asian century, a time when the institutions that established the global order after World War II will give way to a new framework based on new alignments and a new balance of power.
India and China have resolved a border dispute that had festered since the two countries went to war in 1962. India has long distrusted China's close relationship with Pakistan, especially with regard to nuclear weapons' technologies, but India has put that wariness aside to move its relationship with China forward. Trade between China and India is growing more than 40 percent per year. In 2007, China will unseat the United States as India's biggest single-country trading partner. India and China realize they face common challenges of widespread poverty, a growing urban-rural divide, environmental degradation, and galloping energy needs for billions of people. Both know that any one of these problems could derail their impressive momentum, and mire their countries in domestic unrest or regional conflict.
At the same time, India and China are aware that in the race to secure essential natural resources, especially oil and natural gas, and to assert influence over a neighborhood they largely share, they are competitors. But even if China forever eclipses India in sheer economic might and military power, it will never be able to match India's immense advantage as a democracy.
India's democracy is a tremendous soft-power asset and a natural safety valve for its citizens' frustrations. India goes forth in this fragile and rapidly changing world as a friend to superpowers as well as to developing nations, as a global source of cultural creativity and technological innovation, and as an open society.
India is the world's youngest country. Fifty percent of India's people are under the age of twenty-five. By 2015, there will be 550 million teenagers in India. Long after the populations of Europe, the United States, and even China have grown old, India will still be a young country, with no labor shortages and no lack of customers. India's information-technology industry and its role as a global services provider have given the country a boost. Manufacturing is booming in India, while its real economic engine, retail spending, is just beginning to warm up. Buoyed by strong economic growth and a new smorgasbord of consumer goods and entertainment options, India's youth is filled with fresh confidence, fueled by high expectations. They believe the future belongs to them.
The nation has been swept by a can-do spirit that has set India's imagination on fire. A slogan from low-cost Air Deccan, one of several new private airlines in India, certainly fits the mood: "Every time we take off, the whole economy looks up."
Gopal is a forty-eight-year-old taxi driver in Bangalore. He is very proud of his daughter, seventeen, who is a star student. He wants her to get a job in Bangalore's information-technology industry. He's been driving for a living for more than twenty years. He owns the car, which he drives six days a week, up to twelve hours per day to make a living. "What do you think about India's future?" I ask him on our third day together. "Very fine. India is going to be number one." He turns his head, breaking into a broad smile and scaring the hell out of me because he's no longer looking at the crowded road.
Durgavati Upadhyay, a nineteen-year-old college student in Bombay, tells me, "You see, America is coming down whereas India is moving up. You people will not like it. But it is there," she says, cocking her head in a move that is at once demure and defiant. She lives in one of Bombay's slums. Her father, a taxi driver, supported her desire to go to college over her mother's objections.
Bhavesh Bavishi sells auto parts in Akola, Maharashtra. The thirty-five-year-old husband and father says, "India is coming up. You can see it. We feel very proud. We have done very well. My son, he will do even better." His extended family all around nod their heads.
Nandan Nilekani, the CEO of leading Indian information-technology company Infosys, tells me in his office in Bangalore, "People are seeing light at the end of the tunnel. Finally, we are going to break out of this trap. There's a sense that our future can be
better for our children than for us. That has put us into problem-solving mode."
Nilekani is a legendary figure in India's technology boom and an international celebrity thanks to his acknowledged role in giving Tom Friedman the idea for his blockbuster book The World Is Flat. Nilekani positively lights up when he begins talking about his company: "Infosys is symbolic of this moment of possibility for India. We have sixty-six thousand employees and the average age is twenty-seven. It's about building a global brand. It's about achieving on merit. It's a company about the future, and not about the past."
Striding onto the World Stage
"A company full of Indians" paying in "monkey money," is how former Arcelor chief executive Frenchman Guy Dollé described the bid by Indian-owned Mittal Steel for Europe's steel giant. In June 2006, after months of high-profile wrangling -- and after the government of India oddly stepped in to defend a native son who lives in London, owns a Luxembourg-registered company, and had, at that point, never invested in his home country -- Mittal Steel succeeded in taking over Arcelor. Indians around the world were jubilant.
For Indians, Mittal's takeover of Arcelor symbolized the coming-of-age of Indian business and the end of a Western commercial imperium. Until Mittal came along, French fears about globalization were emblematized by the Polish plumber willing to work for wages far below French levels. The Indian corporate raider proved a much scarier avatar. Despite Mittal's assurances that there would be no mass layoffs of workers at Arcelor, whose generous wage-and-benefits packages are everything the French fear losing, many French couldn't shake the impression they'd let the fox into the henhouse.
Shortly after the Mittal Steel coup, Vijay Mallya of India's United Breweries went after Taittinger champagne. The French said, "Assez." Unspecified "local interests" upped competitive offers, and Mallya withdrew his offer. Steel is one thing, champagne is another!
Indian companies have been quietly acquiring companies around the world, including in Europe and in the United States. Bharat Forge owns companies in Sweden, Germany, the United Kingdom, the United States, and China. Infosys is expanding its operations in China, the United States, and Europe. Indian wind-power giant Suzlon has snapped up companies in Europe and the United States and invested in wind farms in Minnesota. In 2005, Indian information technology leader Wipro acquired New Logic, a microchip company involved in mobile communications based in the French high-tech center of Sophia-Antipolis.
Mere months after the Mittal takeover of Arcelor, Indian steel giant Tata smoothly sealed a deal to buy the Anglo-Dutch steel concern Corus for a cool $8.1 billion in cash. Tata's beverage company, Tata Tea, now earns more than two-thirds of its revenues from first-world markets. Tata Tea has been systematically acquiring European and American beverage companies, beginning with UK-based Tetley in 2000, continuing with the American tea company Good Earth in 2005. In 2006, Tata bought the American classic Eight O'Clock Coffee; JEMCA, a Czech company; and took a 30 percent stake in American Glaceau flavored waters.
Indian companies expanding overseas are hiring local managers and employees. Tata Consultancy alone has ninety-five hundred employees in the United States. In 2006, they announced plans to hire one thousand more U.S. employees. Mahindra & Mahindra has been manufacturing tractors in Tomball, Texas, under its U.S. subsidiary Mahindra U.S.A. since 1994, and in 2003 it opened a new factory near Atlanta, Georgia. Ranbaxy Laboratories, a leading Indian pharmaceutical company, has nine thousand employees in seventeen countries.
Last year, I gave a presentation on India to my daughter's sixth- grade class. I told them that when they grow up there is a good chance they will work for a Chinese or an Indian company. This didn't seem to bother them at all. Americans who once feared their job being offshored to India may find new job opportunities working for Indian companies. Europeans will increasingly find themselves in the same situation.
In his living room on the Worli seafront in Bombay, Tata Consultancy Services (TCS) chairman T. C. Ramadorai told me, "Asia had a global leadership role for thousands of years, then it shifted to Europe, then to America. Now it is shifting back to Asia. It is going to be difficult for the United States and Europe to accept the fact that Asia, including India and China, but also Malaysia, Singapore, and others, will be the center of wealth-creation."
The Third Industrial Revolution
"Any business that does not require physical presence can be cosourced," Azim Premji, CEO of Wipro, one of India's largest companies engaged in offshore outsourcing, told me at his company's headquarters in Bangalore. India has become a major source of skilled, low-cost labor, with a corps of English-speaking, highly skilled workers who can compete with the best, especially in technology and science, for a fraction of what a comparable worker is paid in the United States or Europe.
Kiran Mazumdar Shaw, CEO of Biocon, the pioneering Indian biotechnology firm, and one of India's most prominent woman executives, told me: "India has the potential to be the laboratory of the world. We have bright minds and a cost advantage. We're addressing the medical needs of the world and we're saying, 'You have to develop drugs that are affordable. Two-point-five-billion dollars in development costs for a single drug is not sustainable.'"
India is becoming an important center for research and development for scores of major multinational companies. IBM has invested nearly $2 billion in India over the past four years. It plans to triple that to a total of $6 billion over the next two years. IBM now has 43,000 employees in India out of 330,000 worldwide. Intel will invest $1 billion in India over the next five years; Cisco, another $1.1 billion. Microsoft will invest $1.7 billion and hire 3,000 more employees.
The proportion of jobs in finance, technology, life sciences, human resources administration, and business management outsourced from Europe and the United States to the developing world is expected to increase from its current level of less than 5 percent to 30 percent by 2015. By the same year, an estimated 3.5 million white-collar U.S. jobs along with $151 billion in wages will be outsourced, with India the top outsourcing destination.
The world economy is undergoing a major reorganization that is rebalancing jobs and capital investment toward Asia. Information and communications technologies have created an environment where the only jobs that have to remain local are those that require face-to-face interaction. All others can be outsourced to a remote location leveraging digital technologies. Alan S. Blinder, a professor of economics at Princeton University, calls this the third industrial revolution. The first was the shift of labor from farms to factories. The second was the shift from manufacturing to services. The third is a shift made possible by the information age.
Blinder believes that the ultimate dimensions of the third industrial revolution "may be staggering." Though it is neither possible nor desirable to reverse a revolution, I share Blinder's conviction that "the governments and societies of the developed world must face up to the massive, complex, and multifaceted challenges that offshoring will bring." At this point, they are not. In the United States, workers whose jobs have been lost due to offshoring are left largely to their own devices.
With more and more highly skilled jobs in India, brain drain -- the flow of talent toward the developed countries of the West, especially the United States, that characterized the second half of the last century -- has developed a countercurrent in this century: brain recirculation. My Indian father, an aeronautical engineer, had hoped to return to India after college in America, but there were no opportunities to match what he could get in the United States. Today, as Indian businesses expand in Europe, and European and American companies move into India, the demand for foreign-educated Indians and Indians with experience in the world of international business is growing. High-paying jobs and private communities offering American-style amenities are flourishing in India, and more and more Indians are deciding it is time to go home. Indians returning from the United States and the United Kingdom are a powerful modernizing influence on their mother country, demanding more efficient services, complaining about corruption, voicing their dissatisfaction with poor infrastructure.
In 2003, The Indus Entrepreneur group (TIE) estimated that fifteen thousand to twenty thousand Indians had left Silicon Valley to return home. Amar Babu of Intel India told me that about 15 percent of Intel's employees in Bangalore are Indians who have returned from the United States. Many people who return from the United States have imbibed a good dose of entrepreneurial spirit. They are using their entrepreneurship and their money to create new businesses in India. Some are basing themselves in India, some are starting new companies in India while remaining based in the United States. Others are in an airplane so often, they don't know where they live anymore.
The Indian Renaissance
India's 1.2 billion people and 20-million-strong diaspora are beginning to flex their cultural and economic muscles. "Who needs the American audience?" film producer Smriti Mundhra told me over lunch in New York. "There are only three hundred million people here." This statement absolutely floored me. I doubt the American audience, with its bottomless appetite for entertainment, is going to cease to matter any time soon. But Smriti has a point: everything is on a different scale in Bombay or Beijing than it is in New York or Los Angeles.
"The great comic heroes we know and love," Sharad Devarajan, the man who took Spider-Man to India, and is part of the new Virgin Comics and Virgin Animation venture, told me, "have fifty years of history. But in India we have superheroes with five thousand years
of history." India's rich cultural heritage provides a deep well of creative material from which to craft art and entertainment for the world's first truly global audience.
As Sharad and his partner Gotham Chopra see it -- drawing inspiration from their mentors filmmaker Shekhar Kapur and spiritual guru Deepak Chopra -- they are involved in nothing less than the creation of an Indian Renaissance. Much as the finest achievements of Western art and philosophy were forgotten during the Middle Ages to be rediscovered to dazzling new effect in the Italian Renaissance, Indians believe that Indian art and philosophy have too long slumbered under the darkness of Western imperial domination and its aftermath. "The world needs a new mythology," Deepak Chopra told me. Indian culture has all the elements to create one.
"It's so exciting," Sharad and Gotham told me separately. "You feel like you are one of the Medicis when you are in the studio in India."
Evidence of India's renaissance is everywhere. Once again, the world thrills to Indian fashion, Indian music, and Indian-inspired clothes. Indian actors are on television and movie screens across the United States and around the world. Forty years after the Beatles put India on the map of Western consciousness, Indians are situating the West on a new global topography. Indian movie directors and producers are tying up deals with Hollywood heavies. Indian animation companies are not only producing content for the world's biggest media conglomerates, they are building their own intellectual property. Indian audiences and Indian consumers have the numbers and are beginning to have the money to command the attention of media companies around the world, while Indian entertainment companies are taking their talent and vision global. Last November, the Virgin Comics team signed up Hollywood megastar Nicholas Cage to play the lead role in a feature film version of their comic book saga The Sadhu.
An astonishing 40 percent of the world's poor live in India, including one-third of the world's malnourished children. A report to the United Nations General Assembly in September 2006 by special rapporteur Jean Ziegler, The Extent of Chronic Hunger and Malnutrition in India, indicated that hunger and malnutrition are bigger problems now in India than they were in the 1990s, and that the gap between those who eat well and those who can't get enough to eat has widened. In a country that prides itself on its information-technology leadership and strong economic growth, a shocking number of Indians live in conditions no better, and in some cases worse, than in sub-Saharan Africa.
According to a report last year from UNAIDS, India has the world's single largest population of people with HIV/AIDS, more than 5.7 million people, though the actual number may be much higher -- there are simply no reliable mechanisms for getting accurate numbers. A host of private foundations are working with UN agencies and the World Bank to bolster the efforts of the Indian government to stem the tide of this dangerous epidemic, and provide care and low-cost treatment for victims. Generic drugs produced by Indian pharmaceutical companies have driven down the costs of treatment dramatically, in India and in other parts of the developing world. Whether India will be able to conquer the spread of this terrible disease in time to prevent serious damage to its economy is an open question. A 2006 report from the National Council of Applied Economic Research (NCAER) put the cost of an unchecked HIV/AIDS epidemic at .86 percent of India's annual economic growth for the next decade.
When I met him for coffee in Bombay recently, Ajit Balakrishnan, the founder of Rediff.com, India's largest Internet portal and a media company that owns the newspaper India Abroad among other publications, sketched for me his worst nightmare: "Do you want me to tell you what keeps me up at night? I'll tell you. I may not have these figures exactly right, but I'm not far off. When we got our independence, eighty percent of our GDP came from agriculture and seventy-five percent of our people lived in rural areas. Today, only thirty percent of GDP comes from agriculture, yet nearly seventy percent of our people still live in rural areas. We probably only need about ten percent of the population engaged in agriculture. So you tell me how the hell we are going to create five hundred million jobs for the people who are going to come off agriculture and will need employment, plus the tens of millions of jobs we need for the under- and unemployed already in the cities, plus the new generations coming up as the population continues to grow? That," he said, leaning back in his chair and fixing me with his eyes, "is what keeps me up at night."
India's IT sector has attracted international attention and created a shift in the mind-set of a new generation of Indian youth, who see that merit and hard work can lead to recognition and success. However, for all the visibility of high-tech Bangalore, India's information-technology businesses have only directly generated 1.3 million jobs with another 3 million jobs created indirectly. This does not remotely approach the scale of job creation India's growing population requires. Manufacturing will create some of the jobs India's youth so badly need. New credit products, especially in microfinance, will allow others to launch small-scale businesses. The development of rural India, where 850 million Indians live, has the potential to improve farmers' lives and to create new opportunities in the country's small and midsize cities. India will need all of this, and more, to meet the basic needs and newly kindled aspirations of its many people.
Nandan Nilekani agrees that job creation is one of India's biggest challenges. Speaking of the information-technology sector alone, he told me, "We need to really improve our economic growth because we need to create ten to twelve million new jobs. There is also a great deal of regional disparity: Goa's per capita income is four times Bihar's. Globalization is in our favor. Innovation is not a problem. We have no shortage of ideas but the challenge is scaling it up."
The challenge is also to act quickly and to deal with multiple crises all at once. In addition to hunger, HIV/AIDS, and mass unemployment, India is facing a severe water crisis. With 17 percent of the world's population but only 4 percent of the world's freshwater, India's water resources are already stretched beyond capacity. Its aquifers are being drained faster than they are being recharged, causing dangerous chemicals including arsenic and fluoride to leach into remaining underground water stocks. India's water is also highly polluted with raw sewage, untreated industrial waste, and pesticide run-off. China is threatening to dam the Brahmaputra River before it reaches the Indian border, a move that would have devastating consequences for millions of Indians.
Global warming is shrinking glaciers in the Himalayas and may be altering the rainfall patterns on which much of Indian agriculture depends. A process that will affect the tropical South much more negatively than the temperate North, global warming has the potential to drown India's Maldives islands and submerge coastal areas that are home to hundreds of millions. In West Bengal and neighboring Bangladesh alone, as many as 60 million people could be displaced by predicted rises in sea levels if nothing is done to dramatically curb greenhouse gases.
India's rush to develop its steel industry and manufacturing base is pushing mining interests into areas traditionally home to Tribals, or Adivasis as they are now known. There have been bloody conflicts in mineral-rich areas in the states of Chhattisgarh and Orissa between powerful steel companies and indigenous people being expelled from their ancestral lands. Extreme economic deprivation and cruel social divisions have fueled the growth of a Maoist rebel movement called the Naxalites, after the town of Naxalbari in West Bengal where a splinter group from the Communist Party of India staged a militant peasant uprising in 1967. The Naxalites have now spread far beyond West Bengal. The movement boasts an army of some 20,000 and an unknown number of sympathizers whose ranks are being swelled by brutal social and economic injustices. Villagers where the Naxalites are active are caught in the cross fire between rebels and security forces. A senior Indian analyst confided to me in New Delhi last year that some fear the Naxalites' so-called Red Corridor has the potential to stretch the full length of India and link Maoist rebels in Nepal with guerrillas in Sri Lanka.
Clearly, India faces daunting challenges that must be overcome -- and fast -- or the incredible momentum of India's resurgence will suffer.
Innovating to Survive
One top Indian executive told me, "We have a window of between five and seven years." India does not have the luxury of time. It must immediately address a host of problems in ways that are scalable and sustainable. It must leverage new technologies to minimize environmental damage while maximizing scarce resources to bring badly needed benefits to a huge population. India will have to use its proven talent for technological innovation to create the solutions it needs.
India's new cars, power plants, and factories risk adding millions of pounds of carbon to an already overloaded atmosphere unless the country moves to power its growth with clean, alternative energies. India is the only country with a Ministry of Non-Conventional Energy. It has the potential to become a leader in new technologies for clean energy production. The Indian company Suzlon is an example of how India can scale up alternative energy, and take it global. In just a few years, Suzlon has become one of the world's leading wind power companies, selling power to utilities in the state of California and other foreign markets. As oil prices rise, alternative technologies are becoming increasingly more attractive. India has the technological acumen and the pressing need to find clean energy solutions.
India is using digital technologies to bring health and education services to the poor in remote rural areas. It is developing generic drugs and low-cost therapies for pandemic disease. It is creating new paradigms for delivering quality health care, including state-of-the-art surgeries, to the poor. "We are trying to dissociate health care from affluence," Dr. Devi Shetty, the founder of Narayana Hrudayalaya heart hospital and one of the most extraordinary people I met in India, told me. "People may continue to be poor, but they will have access to high-tech health care with dignity." India has also become an attractive destination for medical outsourcing: Americans who cannot afford expensive procedures in the United States can travel to India and have them performed for a fraction of the cost.
India is using technology to drive down the cost of basic goods, making them affordable to more and more people. India is producing $20 mobile phones and designing $2,000 cars. It is making low-cost computers that resist high temperatures and repeated power interruptions. It is setting up test models of small-scale power plants run on crop waste, where farmers can sell excess electricity back to the grid. Most people in the world cannot afford the prices charged for goods and services in the West. India has the potential to make those goods and services available at prices the whole world can afford.
In his famous speech, broadcast on the radio at the midnight hour of India's birth as an independent nation on August 15, 1947, Jawaharlal Nehru, the country's first prime minister, articulated the new nation's promise to its people:
The future beckons to us. Whither do we go and what shall be our endeavor? To bring freedom and opportunity to the common man, to the peasants and workers of India; to fight and end poverty and ignorance and disease; to build up a prosperous, democratic, and progressive nation; and to create social, economic, and political institutions which will ensure justice and fullness of life to every man and woman.
These goals remain as inspiring as they have been elusive. India's poor still wait for opportunity and justice; too many of their lives are still fraught with poverty, ignorance, and disease. No doubt, some of the worst exploitation of human beings occurs in India -- indentured servitude, sexual trafficking of women and children, child labor, female feticide and infanticide -- and the less dramatic but just as debilitating daily violence of poverty, disease, and hopelessness.
Faced with crisis situations it must solve or risk squandering the incredible promise of this moment, India is undertaking the Herculean task of fulfilling the pledges Nehru made at the hour of India's independence. It has taken the country sixty years to reach this point, not a long time in the career of nations; no time at all on India's ancient civilizational time line.
India realizes that it must invent its own way in the world. Over and over, I have heard some version of the following radical strategy for India's success. The starting premise is counterintuitive: treat every problem as an opportunity. In a nation of more than 1 billion people, begin with the assertion that, in a knowledge economy, every untapped brain is an asset waiting to be realized. Bring the proven power of entrepreneurship to bear on the most intractable problems but don't assume that private investment alone can do the job on the scale and at the speed required. Forge partnerships among business, government, and NGOs. Nurture networks and mentor relationships between those who have the know-how and those who want to learn; between those who have the capital and those who need seed money. Relentlessly drive down costs in order to drive down prices. Listen to the poor; they know what they need. Empower them by giving them a good education and the means to earn a livelihood. Figure out how to meet their needs, and you will do well.
"By design," Shiv Sivakumar, who is the creator of ITC's innovative e-Choupal program that links farmers to markets in rural India, told me, "our models fuse the belief that we can only do well if we do good, and we only do good when we do well."
Narayana Murthy, the recently retired cofounder of Infosys, has a theory of "compassionate capitalism." He told me how he sees it: "The primary role of a corporation is to create wealth, legally and ethically. That is our primary responsibility. In the context of a developing country like India, however, the corporation's responsibility goes beyond that. You must create goodwill in the society. That doesn't mean business should take over the government's responsibilities. The major contribution where a company can create a public good is in private-public partnerships."
In the United States, to paraphrase Charles Erwin Wilson, former chairman of General Motors, in testimony he gave to the Senate Armed Services Committee after being named secretary of defense by President Eisenhower, "What's good for GM is good for the country." Since this sentiment was uttered in 1952, GM has fallen on hard times, laying off thirty thousand people in the United States in 2006. Still, the notion that whatever favors corporate America is good for the American people remains a core concept for U.S. foreign and domestic policy.
Most Indian corporate leaders I have met turn the formula on its head. They truly believe that their businesses will ultimately succeed to the extent they contribute to addressing the pressing problems of their country. Mukesh Ambani put it succinctly, "What's good for India is good for Reliance."
Y. C. Deveshwar, chairman of ITC, one of India's largest corporations, delivered a rousing speech last year to his shareholders. While he was pleased to announce to investors that annual returns were 30 percent, he was truly proud to tell them these results had been achieved "even as your company is creating new benchmarks in Triple Bottom Line performance." As the head of a company whose traditional business is tobacco, Deveshwar has special incentive to turn ITC into a good corporate citizen. Still, the company's corporate responsibility profile is impressive. ITC, which was already "water positive," became "carbon positive" in 2006 and is well on its way to achieving "zero solid waste status."
The Triple Bottom Line takes into account financial, social, and environmental returns. Mr. Deveshwar attributed ITC's success across all three of these bottom lines to the company's values, deeply rooted in a distinctly Indian ethos. This ethos, Deveshwar maintained, "determines choice of corporate strategy, orients such strategy in favor of Indian value chains wherever feasible, and engages the organization willingly in confronting the larger societal challenges of inclusive and sustainable growth."
Increasingly, some of India's most visionary leaders are coming around to this new capitalist paradigm that creates wealth and promotes social inclusion and environmental sustainability. India's government has made a politics of inclusion the centerpiece of its domestic policies, emphasizing improved education for all and enacting a National Rural Employment Guarantee Act to provide a minimum social safety net to India's rural poor. The reason is simple: there is no other way.
The Power of Imagination
From Anand Mahindra to Mallika Dutt, from Gotham Chopra to Rohini Nilekani, I have heard so many Indians say that the only thing that can hold their country back at this critical historical moment is a failure of imagination. The same is certainly true for the rest of us. Our planet teeters on the edge of so many terrifying crises, from global warming to lethal pandemics to the anarchy of terrorism and war. To believe that economic growth and development are possible only by sacrificing the life potential of billions of human beings or by inflicting colossal damage to our shared environment is to suffer from an acute failure of imagination. If India can create a knowledge economy that is an economy attuned to the challenges it faces, if it can change the information age into an age of wisdom, it will save itself -- and the rest of us as well.
In the best of all possible worlds, India's politics of inclusion will temper the economic divisiveness of American capitalism, while American-style entrepreneurship will spur India's economy. India's commitment to a multipolar world and to the democratization of the emerging world order will curb America's overt unilateralism. India's focus on innovation in developing alternative energy sources and in extending educational opportunities, medical care, and livelihoods to the poorest citizens will catapult India into leadership positions in a host of new areas, forcing the United States to reconsider its policies and priorities. The commitment of Indian companies to doing well by doing good will set the example of an inclusive capitalism that will be a model for the world. The tired old argument that the United States would like to do the right thing -- for example, reign in the production of greenhouse gases -- but just can't afford to do so will be put to bed as India shows the world no one can afford not to address these problems. By daring to imagine a different world, India will surge forward on a wave of economic growth fueled by innovative solutions to the problems that threaten our collective future.
As Goes India, So Goes the World
No matter which pressing problem we contemplate -- from global warming to pandemic disease to the energy crisis to yawning gaps between the rich and the poor -- time is of the essence. With its large population and rapid economic growth, India faces all of these challenges with much more urgency than people in the industrialized world. We must pay attention to where India is heading: we are all likely to end up there, sooner or later.
India encompasses all the promise and peril of this critical moment in human history. The Indians I have had the privilege of meeting and who shared their vision and dedication with me marry incredible ambition to problems so terrifying many of us are tempted to pretend they don't exist. Indians don't have the luxury of pretending. Ultimately, neither do we.
India is already touching our lives in more ways than most of us realize. In a very real sense, we already live on planet India. This book is about what kind of planet that can be.
Copyright © 2007 by Mira Kamdar
Excerpted from Planet India by Mira Kamdar Copyright © 2007 by Mira Kamdar. Excerpted by permission.
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Table of Contents
Life on Planet India
Indians and Americans
India Imagines the Future
The Other India
As Goes India, So Goes the World