Economic power shifting towards Asia, but India needs to open its doors

KUALA LUMPUR – The global shift of economic power may be heading towards Asia, but in order to fully capitalise on it, India must open its doors more and become business-friendly. 

Panellists at the Horasis India Meeting on July 24 agreed that India should grab the opportunity to be a regional, if not global leader.

During a discussion on “Oscillating between Globalisation and Self-Reliance”, former Sri Lankan prime minister Ranil Wickremesinghe, Tata Chemicals (India) managing director R. Mukundan and PETRA Group chairman and chief executive Datuk (Dr) Vinod Sekhar called on India to be a counterbalance against growing influences, including China.

Former premier Ranil took India to task over its position in global trade agreements, pointing towards the Trans-Pacific Partnership (TPP) as well as the Regional Comprehensive Economic Partnership (RCEP).

India is not a part of both TPP and RCEP, which feature participants from Asean states, economic powerhouses such as China and Japan, as well as Australia, New Zealand, and Canada.

“India is out of these agreements, so how can it develop? If India wants its value chain to develop, you must join (these trading blocs),” Ranil said. 

He drew parallels between the present shift of the economic pendulum towards Asia, and the situation in the 19th century where the two biggest economies were located in Asia – China and India.

The economic growth in these countries then was what led the United Kingdom to fuel its empire and the fertile ground needed for Europe to achieve its industrial revolution, he added.

“(Asia) is getting it back, and now the Asian and African regions must create a new market,” said Ranil.

Mukundan meanwhile questioned the benefits of India's present trade agreements with Korea and Japan.

He said these agreements are not only about the trade of goods, but also investments coming into India.

“How much investment has come into India from Japan and Korea?” 

Alluding to Indian entrepreneurs who are competitive and willing to engage with the world, Mukundan said the country needs to reciprocate by improving ease of doing business, reducing costs of doing business, and plugging itself into the global supply chain.

Mukundan also said it is crucial for India to join regional networks to globalise the country and the Asian region.

“You can't globalise without regional networks operating in a very efficient way,” he added.

Mukundan singled out another emerging economic region, Africa, that is in danger of becoming a missed opportunity for India.

“One of the big benefits India has is a huge diaspora in Africa. Like it or not, there is a cultural affinity to India,” he said.

“Look at Tanzania, their entire school system was run by Indian teachers.”

He added that India’s presence in the African continent would be very much welcome and would serve as a perfect counterbalance to China’s increasing might.

“If you look at the conversations being had in Africa, they don't want one country monopolising their infrastructure,” Mukundan added.

Vinod also urged India to open up to foreign businesses, and refrain from creating policies that deter businesses from entering its borders.

“Look at one of our companies, Green Rubber. We manufacture our equipment in China, but our R&D and technology plants are India-based, while our main manufacturing is done in Malaysia.

“India should not prevent that or create policies that deter small companies like us from growing.”

Vinod added that the African continent is ready and ripe for economic investment, particularly in countries like Nigeria, South Africa, Botswana, and Ghana.

“Malaysia is 7 to 8% Indian. There is this ability for us to culturally work together and Africa is an absolute market that has yet to be fully tapped.

“We have allowed China to take charge of the African narrative,” he added.

“India can lead us and go forward. Take along Sri Lanka, Malaysia, and the others, go into Africa, and play a significant role.”

The International Monetary Fund projects India’s economy to grow by 6.9% in the next fiscal year, amid the Covid-19 pandemic. 

This is lower than the 8% needed to achieve Prime Minister Narendra Modi’s pledge to turn India into a US$5 trillion economy by 2025.

The Horasis India Meeting is a follow up to the Horasis Global Meeting, which was held virtually on June 8.

Founded in 2005, it is one of the world’s foremost discussion forums, offering an ideal platform to explore and foster cooperation, impact investing and bring sustainable growth across the world.

It is aimed at bringing the best minds and decision-makers from business, government, innovation, and other disciplines to look at ways to solve global problems, be it poverty eradication, racial injustice, economic inequality or environmental destruction.

PETRA Group is a strategic partner, and Vinod its co-chair. – The Vibes, July 28, 2021