It wasn’t long ago that the mental image that India conjured looked like this: itinerant cows roaming dusty streets, colourful sadhu holy men and backpackers living it up on the hippy trail on a dollar a day.
Of course, it’s still much the same in grate swathes of this exotic nation, but a multitude of well-healed, bright individuals are helping to temper the stereotype.
The idea that India might one day provide the main engine behind the global economy would have seemed laughable a decade ago. And yet here it is; measured by purchasing power parity India has become the fourth largest economy in the world.
India’s GDP has grown steadily over the last few decades at an average annual rate of six percent (even tipping 8.1 percent in 2005), making it the second fastest-growing market in the world. The country is today undergoing a consumer boom fuelled by a muscular economy that rivals even that of China.
China’s economy is set to exceed the US by 2040, but India’s more youthful population is set to overtake China’s by 2050. Consequently, India is set to outstrip its Asian neighbour in both population and economic growth.
The nation’s colossal labour force of 482.2 million outnumbers the entire population of America by more that one-and-a-half times. Two-thirds of them still earn their livelihood through agriculture – which actually contributes comparatively little to the nation’s overall GDP. It’s an anomalous human resource that’s catapulted India to the top of the scales.
Every year, the nation produces a huge number of highly educated individuals who are fluent in English. In fact, it’s estimated that by 2010, India will have more English speakers than anywhere else in the world, and in the last decade, India has made huge inroads into cornering the world’s service needs thanks to this intellect-blessed army. Their financial rewards of are now clearly visible on the streets of India’s most dynamic towns.
As a business traveller, there’s very little difference here to visiting Denver or Düsseldorf. Thoughtfully, the local authorities include the occasional sign in written Sanskrit to remind you that this is indeed India.
“Work culture here is similar to that I have experienced in the west,” systems analyst Dinesh Rau told me.
“That’s probably because most of the seniors and managers in our company have been exposed to work culture in the west and they are comfortable “importing” the best practices.”
Bangalore has been dubbed ‘India’s Silicon Valley’. The city – located 1,000km from Mumbai in the southern half of the subcontinent – is the main contributor to India’s $12.2bn IT and software export market. Over 50 different international companies have offices here, including: Sun Microsystems, Siemens, Novell, McAfee, IBM, Dell, Cisco, and Alcatel. All are located in the three main IT business parks that are clustered around the city – Software Technology Parks of India, Bangalore (STPI); International Technology Park Ltd. (ITPL); and Electronics City. In fact, from the company logos and office architecture you’d be hard pressed to distinguish it from Silicon Valley.
India has attracted a lot of attention for attracting foreign investment such as call centres, and for many in the West, outsourcing has become a dirty word. But the days are over when India’s information technology services firms were seen as the sweatshops of the computer world.
Amongst the techno elite in Bangalore, there’s a real feeling that the city – and India as a whole – is taking on the world. Today they provide the full range of IT services, from call centres to software development to
consulting. Everyone from the US government to banking giants UBS Warburg are outsourcing work to India.
Plus, they also realise that there are hundreds of millions of people within its very borders who will be demanding mobile phones and computers in the coming decades. The country is home to a sixth of the world population and more than half of them are under 25 years old. This colossal domestic market is one that India’s hi-tech industry fully intends to exploit by itself, without giving the whole opportunity away to rivals in the west or elsewhere in Asia.
Until 1991, India’s economy was stuck in the same rut it had been in since gaining independence in 1947. While the other Asian tiger economies roared into life, India’s meandered along at a steady rate of just three percent. Gandhi’s socialist influence on economics – the so-called ‘Hindu rate of growth’ – meant that the prevailing economic strategy was to champion equality and social stability over wealth.
As a consequence, Indians weren’t pre-occupied with making money. Anyone wishing to better themselves, studied first in their homeland, then high-tailed it to west for their profession.
After the economic reforms of 1991, that all changed – government controls on foreign trade and investment were reduced and the markets opened up. The message now is similar to that which Deng Xiaoping espoused in China during the 1990s – “To get rich is glorious.” And soon India will have 3.8m households with an annual income of 10m rupees (£130,000).
Of course, not everyone earns that. In fact, the average programmer in Electronics City earns $5,880 a year. About a sixth of what his contemporaries in the west would bring home.
“I started receiving my pay check in rupees,” Says Mohan Babu, who returned from Colorado to work for Infosys’ SetLabs in Bangalore. “Looking at my pay check and intuitively converting it into dollars, I was not surprised at why all the multinationals are flocking to India.”
Babu says the average salary of a Project Manager or Senior Architect’s salary easily pays for all the essentials: food, clothing, entertainment, a well-appointed house, and even a servant. It’s no match for the dollar outside the country, but the Rupee still goes a long way in India.
Despite being half a world apart, there’s little difference between him and his former colleagues in the US, Babu says. “Thinking in Java is what Java programmers do whether they are in Bangalore or Boulder. The building-blocks in most technologies remain the same. Work and technologies, project cycles, implementations and systems are still universal, especially since the clients of Indian software companies are predominantly American..”
Like most of the nation’s information workforce, Babu is an alumni of India’s Institutes of Technology (IITs). These higher education facilities were founded soon after India gained independence from Britain in 1947. Their purpose was to train engineers and scientists to help build the nascent nation’s infrastructure.
Many international surveys put IIT’s in the top 50 universities of the world; and having an IIT degree is comparable to one gained from Oxford or Harvard.
IIT alumni include: Infosys co-founder N.R. Narayana Murthy, Sun Microsystems co-founder Vinod Khosla, Citigroup senior vice chairman, Victor Menezes, and CEO of Vodaphone Arun Sarin. Thanks to these and equally brilliant individuals like them, there’s a world view amongst corporate HR departments that IIT graduates are uniformly intelligent and hardworking.
Unfortunately, armed with this branded educational currency, the upshot has meant that 70 percent of IIT graduates have preferred to stream abroad to take up professional roles in Europe and America. Until now their effect has been felt everywhere but India. Even the United States House of Representatives passed a resolution in 2005 honouring Indian Americans and especially graduates of IIT.
Thanks to India’s burgeoning economy and exemplary prospects for the future, the fifty year brain drain trend has finally been plugged. The percentage of students has fallen substantially, and many like Babu are returning to the motherland.
R.A. Mashelkar is director general of India’s Council of Scientific and Industrial Research. He explains that a growing number of young professionals were returning home to be part of India’s economic boom:
“There was a time when the IIT pass-outs were going abroad, but the latest data shows that the percentage is down to 30 percent. The main reason behind this is now India is being seen as a land of opportunity.
Companies like Infosys and Wipro are now major employers. Reversal of brain drain has now begun and with more opportunities in the country, we would see more professionals returning home.”
Dewang Mehta, president of NASSCOM, the New Delhi-based software lobby group agrees: “Those who established themselves in the United States, built contacts and earned big money are looking homeward. They’re bringing back the money and they’re bringing back the business contacts. It’s fantastic.”
As a result, foreign investors have been pumping money into Indian markets, keen to take a share of its fast-growing economy. Speculators piled a record $10.7bn (£6bn) on Indian shares last year, and the subcontinent come out as a top Asian destination for investment in a survey of fund managers’ top picks. And despite the falls in May 2006, the IMF’s economists still think that India is punching below its weight – the economy they say has the potential to match or even exceed China in the longer run.
Mashelkar has an idea how knowledge superpower status might finally be achieved with a three pronged focus on education, education, and you guessed it – education.
“Only six percent of India’s countrymen have access to higher education, whereas in Korea this figure is 68 percent. We immediately need to increase the enrolment in higher education and we would need to improve the standard of our universities. We need to invest more in the universities.”
Lookout, World – India is about to brain up even more.
India’s major business cities
Mumbai
The largest city in India, Mumbai (nee Bomaby) is home to 17 million people. The city is located on the Western coast of India and it’s early success is due to it’s busy natural harbour. Mumbai is home to Bollywood – India’s film and television industry.
Climate – Located on the Arabian Sea, Mumbai enjoys warm tropical yea-round temperatures. The monsoons fall between June and September providing the city with most of its rainfall.
Food – Indigo – 4 Mandlik Marg -Tel: 022 5636 8999 – Mumbai’s restaurant par excellence, it’s everything you’d hope in a restaurant – inventive cuisine, a wine list to rival anywhere, and an interior to die for.
Accommodation – ITC Grand Maratha Sheraton – Mumbai International Airport. The ultimate in spacious luxury, the Sheraton offers fabulous rooms, three restaurants, and acres of granite and marble. The spa is indispensable during the humid months.
Bangalore
The capital of the Indian state of Karnataka, Bangalore is home to India’s gigantic IT services industry. It’s often referred to as India’s Silicon Valley. Bangalore has a population of six million, making it India’s third-largest city.
Climate – Temperatures rarely drop below 20C in Bangalore, nor do they reach the oppressive heat felt in Dehli. Instead, the IT industry here makes good use of the temperate, dust-free weather.
Food – Karavalli – 66 Residency Rd – For the last decade, Karavalli has been treating Bangalore’s movers and shakers to fresh seafood from Kerala – lobster, pomfret, shrimp, and lady fish – all cooked in unique southern Indian style.
Accommodation – The Leela Kempinski Bangalore – 23 Airport Road – Built in the style of the Royal Palace of Mysore, the Leela Palace is designed to impress. Set in seven acres of lush gardens, it’s worlds apart from the other hotels in Bangalore.
Delhi
New Delhi is the capital of India, and also acts as the nation’s travel hub. The sixth most populous metropolis in the world, the city is home to 15 million people.
Climate – Summers are uncomfortably hot. From April the temperature climbs relentlessly to more than 45°C (113°F) and despite the monsoon season at the end of June, the heat and humidity lasts until October.
Food – The Gaylord – 18 Regal Bld – Tel: 11 2336 0717. Without question, the most sumptuous restaurant in Delhi, with huge mirrors, chandeliers, and excellent Indian food with the never stints on ingredients.
Accommodation – Hyatt Regency – Ring Rd – Not the most central of Delhi’s hotels, but this 500-room five-star establishment is the best bet for business travellers who aren’t looking for pleasant (or unpleasant) surprises.
