For India & China, collaboration is the key

India and China should not be seen as rivals in the global economic arena. Instead, the two giants are coming closer to each other and their collaboration can be an extremely positive development for the world economy.

This view gained wide acceptance at a session on the emergence of India at the annual meeting of the World Economic Forum here on Wednesday. The two countries have many complementarities, which can be exploited to mutual advantage.

For instance, India's manufacturing is more knowledge-driven, while China's is more scale-driven. Similarly, both the countries have huge energy requirements to sustain their healthy economic growth rates and by forming strategic alliances, they could actually get a better deal in the global energy market.

This view was also endorsed in a separate session on China, where a senior representative of the Chinese government underlined the need for greater regional co-operation in Asia as the way forward.

Did that mean the US was losing out and on the decline? The panelists disagreed and felt that the US would continue to remain relevant, important and a big market for both India and China and what the world was witnessing today was the ascendancy of these two Asian countries and not necessarily the decline of the US.

Panelists who debated the issue included Anand G Mahindra, vice-chairman and managing director of Mahindra and Mahindra, R Seshasayee, managing director of Ashok Leyland, Nand Khemka, chairman of the UK-based Sun Group of Companies and Aart J de Geus, chairman and CEO of Synopsys of the US.

There was recognition of the problems India faced because of its poor infrastructure, unmanageable deficits, slow flows of foreign direct investment and the huge demands on the education sector to produce skilled manpower for the job market.

Mahindra agreed that the transformation happening in India was not immediately visible. But the big change that had taken place was that the Indian industry had outgrown its colonial mindset and was beginning to take on the world's best and the biggest.

Indian industry now had the freedom to aspire and the freedom to innovate, he said. Which was why several Indian companies were buying companies in different parts of the world to establish a global footprint.

Seshasayee spoke about the new-found aggression among India's entrepreneurs now that they were largely free from government controls and the mindset change among employees and young managers, a large number of whom now wanted to give up their jobs and start their own businesses.

Ninety-five per cent of students of a business school he had visited recently told him that they would set up their business instead of looking for a job, he said.

The panelists also felt that with the strained relations between Japan and China, the former was looking at alternatives and was, therefore, wanting to increase its engagement with Indian companies through more investments in India. They were also of the view that fears over an outsourcing backlash were exaggerated.

Once the Indian companies benefitting from outsourcing prospered and began buying more American products and increasing their investments in the US, these problems would disappear. Transfer of workforce must be complemented with transfer of revenues, a panelist said.