British economist Angus Maddison once calculated that that before the Industrial revolution, India and China were the largest economies in the world. Of course both totally lagged behind for quite a long time after that.
China opened up its markets in the 1970s and India liberalized its economy in 1991. While China is realizing its full potential and has made it to the Number 2 position in the world in terms of GDP size, India has just about broken into the Top 10.
Since 1991, the Indian tiger has always flattered to deceive. The PV Narasimha Rao regime promised much from 1991-6, but was set back by two years of uncertainty after that. The Atal Bihari Vajpayee government from 1998-2004 brought things back on track and Manmohan Singh promised to take that forward in UPA1 but totally fell flat in UPA2.
In fact the second half of UPA2 is probably the greatest story of scams, lost hope and a grave slowing down of the country?s economy.
But now there?s renewed hope under the stewardship of Prime Minister Narendra Modi. The stock market is soaring, big companies are getting loans and it is just a matter of time before the big infrastructure projects will be rolled out.
The anti-market Left lobby has been neutralized in Delhi and the Ministers and bureaucrats are getting together to make India a business friendly place. Modi is also the first PM who is talking tough on black money and moves have been put into place to recover billions of dollars from Swiss banks.
But countries like America and China have leveraged international trade to become big powers and now India can do the same. In fact reports already talk of US President Barack Obama saying that India can be a US$10 trillion economy.
While this may seem a pipe dream as India?s next target is US$2 trillion, only if you set lofty goals can you meet them. For the US, India is not even among its Top 10 trading partners. There?s no reason why the world?s two largest economies can?t have much greater trade ties.
The other giant is China and Modi has already made many trips to China as Chief Minister of Gujarat. In fact some reports say that he has already implemented some of China?s best practices in his home State.
Things are moving pretty fast in that sphere too. The Foreign Ministers of the two countries have already met and Modi is planning to visit China too. A series of high-level meetings have been planned and apart from border disputes, trade will also be discussed too.
While the US crossed the 10-trillion mark a long time ago and China is in touching range, the third largest economy in the world is Japan and that?s another country that Modi is visiting. It is interesting to note that Japanese Prime Minister Shinzo Abe follows only three people on Twitter (@AbeShinzo) and Modi is one of them.
Another lucrative trade bloc could be SAARC and that way calling all leaders of this region for Modi?s swearing in ceremony was a masterstroke. Sri Lanka is in the process of rebuilding itself after their long Civil War and India has been conspicuous by its absence.
China is currently a major player there. But now that India and Sri Lankan President Mahinda Rajapaksa have broken the ice we can also move in. Of course countries like Pakistan and Afghanistan will prove trickier to increase trade on a large scale.
Reports some time back did say that Adani Power is setting up a 10,000-megawatt power plant in Kutch and is looking to export electricity to Pakistan.
While India has to get its act together on the domestic scene, international trade will be also an integral part of the India growth story should it go to the next level.
While it is difficult to topple the US as the world?s largest economy, China has already captured some of its pre-industrial age glory by coming at No. 2.
Can India at least come third in the years to come? That?s a very interesting question and all eyes will be on India from now on.
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The author is a Bangalore-based journalist and blogger. He blogs here.