Page 386 - Week 02 - Thursday, 8 March 2007
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the outcomes of the delegation and where I see the future of the economic relationship between the ACT and some of the Indian regions, cities and firms that we visited.
Firstly, I would like to make a few preliminary remarks about India which I think are pertinent. India has clearly staked its claim as the next big thing in world economic development. Just as we were coming to terms with the numbers thrown up by China’s rapid development, another set of Indian metrics has captured the attention of every economist, merchant banker and product marketer.
India has a population of over one billion people and is demographically on track in the first half of this century to overtake China as the most populous nation on earth. In fact, each year India’s population grows, by births alone, by the size of the Australian population. It is the youngest country in the world, with around half the population less than 25 years old. It is the largest democracy of the world. As the Financial Times so neatly put it, every time India goes to the polls, it becomes the largest electoral exercise in history.
It is the fourth largest economy in the world in terms of purchasing parity power after the USA, China and Japan, and the second-fastest growing economy in the world. We should not forget that the Indian economy, which has been growing by over six per cent per annum for nearly 25 years, now has rates pushing close to double digits.
There are massive infrastructure investments in the order of $US130 billion currently unfolding across India. There is a stable political environment and recent governments have embraced openness, economic reform and economic engagement, which are truly remarkable achievements given the complexities, challenges and disparities of its society.
Not least, India has a rapidly growing and consuming middle class that is currently 10 times the size of Australia’s total population, or a group of consumers roughly the same size as the population of the United States. The size of that middle class is forecast to double by 2025 to around 50 per cent of the total Indian population.
New Delhi recently became the first city in the world to claim more than 10 million cell phone accounts. It is easy to get dazzled by the sheer numbers and many a business visitor to India goes there with the predictable thought, of course: just one per cent of that market and we are home and hosed.
But as any business that has tried to cut it in an overseas market will tell you, it is hard and India poses a whole new set of challenges, even for savvy exporters who might have cut their teeth elsewhere. Since the early 1990s, India has dramatically opened up to foreign trade and reduced or removed many of the barriers to international competition. Increased trade has also given India’s consuming class access to a wider range of goods and services, which in itself has created an irresistible momentum for reform and further pressure for market access.
These changes explain the strong interest countries and businesses around the world, including in Canberra, are now taking in India. The ACT delegation was an important
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