The Indian economy has become the most dynamic in the world: what's the secret?

The annual report of the UN Conference on Trade and Development, published at the end of September, is dedicated to the approach of the next phase of the global financial crisis. It follows from the document that the “fragile state” of the world economy today is due to high risks for developing countries - financial instability and the threat of a deflation spiral. The BRICS BRICS BRICS group is not justified: soon these states may not be able to pay their debts. Western investors are nervous and moved to more stable markets: last year the outflow of capital from developing countries amounted to $ 656 billion. But there is one country that, on the contrary, has a boom of economic growth.

Bad news from Beijing is being brought down by Western stock exchanges. Brazil is experiencing an acute economic and political crisis, and the Credit rating of South Africa this year can be reduced to “garbage”. Russia is in a difficult structural recession and creates additional political risks. From this rather gloomy picture of the sunset "Emering Markees" only India stands out. Of course, there are enough problems there, but the good news for New Delhi is that the search for solutions will take place against a background of rapid economic growth. In addition, in India they are interested in strengthening economic ties with Russia. In the future, this partnership can be very profitable for both sides.

India goes into a gap

Everyone has some ideas about the unique Indian culture and social structure, but they rarely include the image of the largest economic hub. Meanwhile, this year India officially headed the list of the most dynamic economies in the world. The growth rate of the gross product at the end of the year reached 7.6%, which allows India to bypass this indicator of its closest opponent - China (“only” 6.9%). The advance was largely ensured by a drop in oil prices, since India is a clean importer of this resource. But the trend itself is important here: the Chinese economy is undergoing a crisis of growth model and gradually slows down, while Indian, on the contrary, is gaining momentum.

The average age of a resident of India is 25 years. Millions of young people do not find a job annually

This news allows many economists to argue that India has finally reached the trajectory of rapid development and after a while it will become one of the most influential world powers, which China has already become today. There are several key problems that the government will have to solve, so as not to leave this trajectory ahead of time - absolute poverty (in the country more than 300 million poor people, according to the World Bank), colossal inequality in income and too high fraction of young people in the structure of the population (the average age of the inhabitant of India is 25 years old; millions of young people come to the labor market and do not always find work for themselves).

The main competitive advantages of India are extremely cheap labor resources (the average salary today is 2-3 times lower than in China) and a favorable investment climate. The second point is a direct result of the effective policy of the authorities. The right -conservative president of the most densely populated democracy in the world (1.3 billion people), Narendra Modi, came to power in 2014 under the slogans of religious nationalism and the revival of Hindu (Hinduism professes 85% of the country's population). But they value him primarily for a pragmatic approach to managing the economy, which prevails over ideology and traditions, including a caste structure. Modi’s rhetoric can be nationalist, but in reality his policy has always been based on modernization, removing barriers to doing business, encouraging innovation and opening the economy for foreign investors.

English is one of the state in India, and the share of foreign direct investment in some sectors of the economy can reach 100%. India has already overtaken the USA in the market of smartphone users, controls a huge segment of IE and has every chance to supplant South Korea from the five largest automakers for the year. Thousands of international companies reacted to the government program for localizing the production and growth of industry in GDP - “Make it in India”. At the same time, local authorities initially moved away from the classic neoliberal model, and instead of it they combine the “open door” policy with the “proactive government” - a high level of economy regulation and massive state investments.

Turn south?

After the sad experience of the break with the West and the failed “turning to the East”, economic ties with Indian partners are a very large opportunity for Russia to expand their markets. In Delhi, they assure that interest is mutual, and the number of joint projects is constantly growing. Several large Russian companies are already operating in India, mainly state corporations: Gazprom, Sberbank, Rosoboronexport, Private Siber. Recently, a delegation from Gujarat-a large state in the north-west of India and an economic growth locomotive, which the governor of which has been the current president of Modi, has come to Russia as part of the preparation for the Vibrana Gujaray Forum 2017. In this position in Gujarat, he first worked out his recipe for successful development: improving the basic infrastructure (roads, power supply networks), transparent management and comfortable conditions for investors.

Representatives of the state government say that cooperation with Russia is a historically important direction (strong bilateral communications were formed between India and the USSR during the Cold War). There are two strategic industries, the interaction in which is most actively: these are energy, including nuclear, and military industry (more than 70% of Indian weapons and military equipment - Russian or Soviet production). On the way, new sectors, including renewable energy sources, engineering production, agro -industrial complex and food industry, but the emphasis on the energy and the military -industrial complex is maintained.

The fact is that in addition to military developments and TEK, Russia can not offer its international partners so many. Behind high technology and multimillard investments, India will rather turn to the United States, relations with which Modi have improved significantly. In the summer, the countries agreed that the Americans will build 6 nuclear reactors in India, and also begin to supply “dual -purpose” technologies - that is, they will come to traditionally Russian niches. Russia's positions in comparison with other competitors remain winning, at least due to a long history of partnership and the absence of any conflict points in relations with India.

The Russian authorities lack the economic thinking inherent in the Modi team. Two countries declare the same goal - “turn into a great power” - but go to it opposite methods

From the story with the powerful jerk of India to the Higher League of countries and its comparison with domestic realities, we can conclude that the Russian authorities lack the economic thinking inherent in Modi's team. Two countries declare the same goal - “turn into a great power” - but go to it opposite methods. Two years after the election, the Indians are satisfied with their own way: according to the latest data from the Pew Research survey, 81% of the population favorably evaluate the activities of their president, although some would like to see a more aggressive foreign policy regarding historically difficult neighbors - Pakistan and China. But Modi, who has already committed a 41 foreign visit in two years, perfectly understands the value of diplomacy. Business always refers to geopolitics with fear, and not in vain. As a large Indian entrepreneur, a member of the delegation from the industrial state, Gudzharat Yatindra Sharma, told Novaya Gazeta: “Now we are on the rising trajectory and will develop. If only geopolitics does not offer another scenario, but this cannot be predicted. ”