The Myth of the New India
Thursday, July 6, 2006
Excerpt: INDIA is a roaring capitalist success story.” So says the latest issue of Foreign Affairs; and last week many leading business executives and politicians in India celebrated as Lakshmi Mittal, the fifth richest man in the world, finally succeeded in his hostile takeover of the Luxembourgian steel company Arcelor. India’s leading business newspaper, The Economic Times, summed up the general euphoria over the event in its regular feature, “The Global Indian Takeover”: “For India, it is a harbinger of things to come ? economic superstardom.”
This sounds persuasive as long as you don’t know that Mr. Mittal, who lives in Britain, announced his first investment in India only last year. He is as much an Indian success story as Sergey Brin, the Russian-born co-founder of Google, is proof of Russia’s imminent economic superstardom.
In recent weeks, India seemed an unlikely capitalist success story as communist parties decisively won elections to state legislatures, and the stock market, which had enjoyed record growth in the last two years, fell nearly 20 percent in two weeks, wiping out some $2.4 billion in investor wealth in just four days. This week India’s prime minister, Manmohan Singh, made it clear that only a small minority of Indians will enjoy “Western standards of living and high consumption.”
There is, however, no denying many Indians their conviction that the 21st century will be the Indian Century just as the 20th was American. The exuberant self-confidence of a tiny Indian elite now increasingly infects the news media and foreign policy establishment in the United States.
Encouraged by a powerful lobby of rich Indian-Americans who seek to expand their political influence within both their home and adopted countries, President Bush recently agreed to assist India’s nuclear program, even at the risk of undermining his efforts to check the nuclear ambitions of Iran. As if on cue, special reports and covers hailing the rise of India in Time, Foreign Affairs and The Economist have appeared in the last month.