India Rising: What is New Delhi to Do?

Abstract

At the end of the 1972 Hollywood political comedy The Candidate, Robert Redford—in the role of Bill McKay, the telegenic but politically vacuous senatorial candidate—turns to his campaign manager after winning a seat in the U.S. Senate and says, “What do we do now?” India’s situation is not entirely dissimilar. After having long campaigned to be taken seriously in the global order, India has finally arrived. Now its leadership is unclear about what exactly it wants from the world and what it needs to do going forward. However, unlike the comic hint of doom in McKay’s closing line, India’s elite are brimming with confidence, indeed almost hubris, about India’s economic accomplishments and future potential. According to Kamal Nath, India’s commerce and industry minister, “We no longer discuss the future of India: we say ‘the future is India.’” 1 This exaggerated self-confidence is largely a result of India’s booming economy. In recent months, Indian firms have made a number of high-profile, multi-billion dollar acquisitions in Europe and North America. In early 2007, Tata Steel acquired the Anglo-Dutch steelmaker Corus and the Indian aluminum firm Hindalco acquired its U.S.-Canadian rival, Novelis. India’s auto industries are also making their global presence felt. Tata Motors has already acquired the South Korean firm Daewoo’s truck making unit and is now poised to expand into Latin America in partnership with Italy’s Fiat. Another Indian firm, Mahindra and Mahindra, is already selling tractors in Texas. India’s pharmaceutical firms have also embarked on an aggressive global expansion. Last year, Gurgaon-based Ranbaxy made a number of acquisitions in Europe, the United States, and Africa and is now eyeing Germany’s Merck Generics. Likewise, Hyderabad-based Dr. Reddy’s Laboratories has already acquired the German drugmaker Betapharm. Indian pharmaceutical companies have more applications for patents pending with the U.S. Food and Drug Administration than any other country. India’s low-cost, but world-class, private medical facilities have already made it a preferred destination for high-end medical treatment. In 2004, India