If you read the title to this blog post and thought “only two competing views on India?”, then you are probably well ahead of the pack in terms of understanding the country! However, Andrew Sullivan recently posted two differing views on what is going on within the country, and the two voices he quoted are worth reading at length. When viewed at arm’s length, the country appears to be one of the most vibrant and compelling members of the BRIC nations. However, when viewed more closely, problems related to chronic poverty, an economy that appears to be creating more – not less – income inequality, and inadequate access to social services make it more difficult to claim the country as the next great growth story.
Amrit Dhillon sounds the more cautionary note, quoting a recent London School of Economics’ study on India: “The LSE study by nine India experts concludes that, despite ”impressive” achievements, India is unlikely to become a superpower for many reasons including “the increasing gap between the rich and the poor; the trivialization of the media; the unsustainability, in an environmental sense, of present patterns of resource consumption; the instability and policy incoherence caused by multi-party coalition governments.” Great points all and, with the exception of the last one (policy incoherence) all fully transferable to China. One could go so far as to say the last point might also be fair game relative to China simply because the differences between what Beijing promulgates from its central government and what is enacted at the provincial level remains open to wide interpretations.
Conversely, Shashi Tharoor writes more positively about India in general, and its messy democracy: “By contrast, India strikes many as maddening, chaotic, divided, and seemingly directionless as it muddles its way through the second decade of the twenty-first century. Another view, though, is that India is a country that has found in democracy the most effective way to manage its immense contradictions. This should be exciting, not alarming.” This is not the place to comment on whether India or China’s economic and political models are better than one another; rather, it is simply worth pointing out the two divergent ways in which even those closest to India remain divided on the direction of the country’s economic and political reforms (gosh, that sounds an awful lot like criticisms about China doesn’t it?).
The question remains, what do these two divergent opinions have to say about India’s development and the role India should play in your company’s growth strategy? First, I would not be scared off by the more draconian interpretations of India’s situation. In many ways, you could read Amrit Dhillon’s piece and instead of referring to India, substitute China (and, to that point, not just the China of yesterday, but the China of many of the country’s 300m plus who still live in agrarian poverty). Because of this, none of Amrit’s concerns should be viewed as incompatible with a market for your products developing across India. Second, what Shashi points out is that culturally, India is an extraordinarily diverse and fragmented area to navigate. It lacks the cultural and social homogeneity that China offers, which reinforces a strategy that successful operators in China understand: when building your China business model, think very local. What worked in Shanghai probably won’t work in Chongqing; transfer these Chinese cities to Indian ones and you get the idea, except even more so! Consequently, create a lot of space to try different things and be careful how many operating paradigms you bring from one city in India into another. In many ways India is an emerging economy like China, and successful operators will create even more space than they did in China for their Indian strategies to find room, innovate, and grow.