Wednesday, September 7, 2016

Henry Kissinger moment for India

Hope you know how Henry Kissinger, a US Diplomat, had helped China leapfrog into a high economic growth nation by making it a trade partner for his country. That was few decades ago. I do think the same moment has arrived for India as the world’s biggest economy US is opening its doors wide for the benefit of India. Policy shift brings Henry Kissinger moment for India. See the following news items which provide a proof to my claim.

When iPhones and F-16’s are produced in India, they do bring in the technology know-how, create high-skill jobs, unleash a new industry and at the same time, international export markets too open up for goods manufactured in India. If this trend sees further strength, exciting times are ahead.

Why now?
If you follow the international news, you would have observed how relations between China and USA are strained now. Increased trade between those two countries had helped China to achieve economic strengths but lately it has become aggressive too. What is happening in South China Sea is not pleasing the US. Moreover China has developed good relations with Russia. This made US make policy shift towards India. And India seems to be a willing partner as it allowed US’s defense to use it’s naval base. Before this had happened, Modi has made several visits to US and Obama too had presided in India’s Republic day celebrations.

What would change?
Look at trade statistics.

China’s exports to US are 10 x of India’s to US. Policy shift would move some of this trade (slowly over a decade) from China’s kitty into India’s. That would boost India’s economy. Local manufacturing in India for goods which are imported now will help curb imports and boost domestic job creation. This has potential to turn India from a trade deficit country into a trade surplus nation. What India needs is job creation, skill development and access to larger markets. All these will see a phenomenal improvement when the discussions become a reality. 

Taking a look at the current scenario, it appears India is naturally a best choice for US for geographical and political reasons. So we are seeing the news pieces flowing in. But behind them, Govt’s of two large nations are at work with a serious intention. This would also mean India's relation with Russia would suffer.

Henry Kissinger and his master Nixon had paved way for a new beginning for China with the policies they had adopted. As tables are turned, it appears to be India's chance now. Some of China’s loss will become India’s gain. Not just that, increasing trade would put India into a new potential. That of a superpower, overpowering its neighbors in Asia.

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