In the last few decades, India has been struggling to fight poverty and a population boom, all while undergoing several stages of economic and political reform. However, while it continues to battle domestic concerns, India has begun to exercise increased power on the international stage day by day.
Once known almost exclusively for its rich past, India has recently been receiving a great deal of international attention for its expectedly bright future. This change has been evidenced by the fact that the country has played host to government officials from all over the world in just the last several weeks. French president Jacques Chirac and Saudi Arabia's newly crowned monarch, King Abdullah, made trips to the country earlier last month. President Bush embarked on his visit to India last week.
Invariably, these visits are charged with politically explosive agendas. However, the outcome of these meetings is even more crucial if one takes into account the economic factors. In a historic decision last week, India signed a nuclear agreement with the United States allowing for inspection of its nuclear facilities in return for access to US civil nuclear technology.
While the agreement has sparked controversy, it carries much positive symbolic value. India and the United States have always been friendly, but especially following India's passive alliance with Russia during the Cold War, the two countries have never shared a truly close relationship. The nuclear agreement might set the stage for ameliorated relations. After all, if there was ever any time to strengthen one's ties with India, it is now.
This sudden surge of interest in India is far from coincidental; it reflects a worldwide realization that India might hold the key to the future of the world's economy. Over the past 15 years, India has been experiencing an annual economic growth averaging a phenomenal six percent. Furthermore, a recent Goldman Sachs study indicates that in the next 50 years, India will become the fastest growing of the world's leading economies.
Nevertheless, these numbers do not tell the whole story. India impressive financial growth has not been accompanied by improvements to its infrastructure. India remains, for the time being at least, a developing nation. Ameliorated relations will thus prove to be advantageous for both the United States and India.
Any current desire of the United States to strengthen its ties with India seems self-explanatory. India will soon become even more of a key player in the international market than it already is. In fact, the only major world economy estimated to outgrow India in the future is China, which itself boasts a 10 percent annual economic growth.
Even if this is the case, a relationship with India will present itself as profitable, as Beijing will eventually overtake the United States as India's largest trading partner. Through India, the west can secure itself a stable relationship with other Asian countries without having to deal with the differences in political ideology that persist with China. After all, as the biggest democracy in the world, India possesses a political system that, though flawed, mirrors the political ideologies of the West.
Furthermore, a fortified relationship with India will only be a political manifestation of an economic rapport that has been flourishing for quite a while. With the introduction of outsourcing, the term "globalization" has gained new meaning. Needless to say, American companies and Indian professionals have both been profiting extensively from this movement and will continue do so in the future. While the market for IT outsourcing is estimated to equal 200 billion dollars, Cognizant CEO Lakshmi Narayanan revealed in an interview with Business Week that even at $20 billion a year, the current value of IT outsourcing still has not reached its maximum.
Up until now, global power has always been concentrated in the West. The United States and Europe have always taken on a role of superiority towards other nations primarily for economic reasons. However, current economic growth figures show that this is bound to change in the future. Financial power is shifting heavily towards Asia. A stronger east-west relationship will thus become even more necessary.
