February 6, 2006

THE NATURAL PARTNER (via Daniel Merriman):

India: on Every Business Agenda (Caspar W. Weinberger, 02.13.06, Forbes)

In 1991, following Rajiv Gandhi's assassination, P.V. Narasimha Rao became prime minister. Rao began a series of economic reforms, moving the country toward a free-enterprise system. He ended many government monopolies and encouraged foreign investment and corporate ownership. He also reduced taxes on imported goods. In 1996, however, the Congress party--which, with the exception of four years, had led India since independence--suffered a major defeat. Since then large and diverse political coalitions have been needed to win elections and keep the country politically stable.

In March 1998 a coalition led by the Bharatiya Janata party (BJP) came to power, and Atal Bihari Vajpayee became prime minister. In May India proceeded with nuclear weapons tests and declared itself capable of using and producing such weapons. Perversely, this provided an opportunity for strengthening relations between the U.S. and India. Pakistan soon followed with its own nuclear tests, and tensions between India and Pakistan have since gone through a series of escalations and easings.

Under the leadership of prime ministers Vajpayee and Manmohan Singh (Indian National Congress) the climate for business has continued to improve. India has many assets to recommend it to American and European businesses looking for a base in which to anchor their expansions into Asia. It has an educated, well-trained workforce, a generally strong infrastructure and good communications and informational networks. Because of its years under British rule, it has a long tradition of familiarity with English and of upholding the rule of law. As mentioned, India also has substantial outsourcing experience. It has joined China in becoming a magnet for economic growth.

The Open Skies aviation agreement of 2005 opened up many direct flights between cities in the U.S. and India, facilitating trade and travel between our two countries. Political relations have strengthened along with our business ties. The U.S. and India now enjoy a stronger security relationship and engage in regular joint military exercises.

India is a natural partner for the U.S. in this volatile part of the world. Its economic progress still requires nurturing. We must manage this relationship carefully and well, keeping in mind that any renewal of hostilities among India, Pakistan and China would be disastrous for India's future--and, indeed, that of the world.

Pakistan's was just the first Islamic Bomb that worked in the favor of the Axis of Good.

Posted by Orrin Judd at February 6, 2006 6:20 AM
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