Reimagining India: Unlocking the Potential of Asia’s Next Superpower

By the time Alexander the Great reached the Indus River Valley in 326 BCE, he had vanquished three formidable empires: Syria, Egypt, and Persia. But on a rainswept night on the banks of the Jhelum, an Indus tributary, the Macedonian conqueror’s quest for global domination collapsed at the hands of a Hindu king. Greek historians called Alexander’s Indian foe Porus. According to their record, he stood seven feet tall and commanded an army of thirty thousand soldiers and two hundred war elephants. After an all-night battle waged in a howling monsoon, Alexander eventually forced Porus to surrender. But it was a hollow triumph. By Indian standards, Porus was a minor raja. The Magadha emperor, who ruled the lower Ganges River to the east, had many times more men and elephants. Alexander’s men, exhausted and terrified by the prospect of battling another giant Indian army, mutinied, compelling Alexander, the most successful military commander in ancient history, to turn back home.

Modern visitors, too, can find India overwhelming. Passengers disembarking at Indira Gandhi International Airport’s gleaming new third terminal are greeted by the Nine Mudras, an installation of colossal metallic hands looming above the Immigration counter. The hands, according to their designers, are arranged in delicate gestures from yoga and Indian classical dance to symbolize reassurance, benevolence, “the oncoming of novel tidings,” and the “linkage between the individual . . . and the ever-throbbing life force of the universe.” Travelers proceed under the Mudras, through baggage claim and customs, along the air-conditioned arrival hall adorned with posters celebrating “Incredible India”
and then out onto the curbside, where they are plunged headlong into “ever-throbbing” life—and plenty of it.

An abundance of life—vibrant, chaotic, and tumultuous—has long been India’s foremost asset. As Western economies struggle to recover from global recession, India’s multitudes earn it a place alongside China as one of the world’s two indispensable emerging markets. India, with 1.2 billion people, half of them under the age of twenty-five, is expected to overtake China as the world’s most populous nation before 2025. In good years, India’s sprawling economy has shown itself capable of growing as rapidly as China’s; in 2006 and 2007, Indian GDP surged 8.5 percent. In 2012, according to the Organisation of Economic Cooperation and Development, India likely eclipsed Japan as the world’s third-largest economy.

Asia’s “other superpower” has many strengths. Indian business leaders, unlike their Chinese counterparts, are at ease in global markets; many, if not most, are fluent in English and graduates of leading business schools in the United States and Europe. With increasing confidence, CEOs of India’s leading companies are venturing overseas, making headlines with high-profile acquisitions such as Tata Group’s purchase of Jaguar and Land Rover or Bharti Airtel’s acquisition of Zain’s African telecommunications business. Indian software giants like TCS, Wipro, and Infosys have emerged as global technology leaders, thanks partly to the skills of the thousands of world-class engineers who graduate each year from the country’s famed Indian Institutes of Technology. Indian companies are thriving in other key sectors such as pharmaceuticals, petrochemicals, and steel, demonstrating a capacity for efficiency and innovation that is changing the global competitive landscape. India’s banking system and equity markets are well regulated and far more open to foreign participation than China’s. India’s currency, unlike China’s, trades freely. It is often argued that India, with its wildly pluralistic society, fractious democratic political system, and boisterous independent media, has the potential to show the world’s other emerging markets that
ethnic homogeneity and authoritarianism aren’t the only—or even the best—path to successful economic development.

But there it is, that word “potential”; it crops up all too often in conversations about India. As consultants we hear it again and again, from business executives, government officials, and opinion leaders inside and outside India. Today, almost seventy years since shaking off the yoke of British imperialism, India is reclaiming its historical prominence in the world economy. It has congratulated itself for “rising” and “shining”—but is it doing so as quickly or as brightly as it should?

As
Reimagining India
goes to print, there is growing anxiety, fueled by a severe market downturn, that the burst of economic liberation of the 1990s and the decade of rapid growth that followed have given way to deadlock and complacency. Manmohan Singh, the celebrated architect of the 1990 reforms and now India’s prime minister, has vowed to “take all possible steps” and do “whatever is necessary” to curb government spending and stabilize the economy. But the questions linger: What steps are possible for India? What is the nation’s true potential? And what can be done to unlock it?

This book is an effort to encourage discussion and debate about those questions.
Reimagining India
follows the spirit and format of
Reimagining Japan
, a McKinsey-edited essay collection published in the wake of the “triple disasters” of earthquake, tsunami, and nuclear crisis that struck Japan in 2011. As with the Japan book, we have sought wisdom from many dimensions, social and cultural as well as economic and political. We have solicited essays from India’s leading business executives, CEOs of some of the world’s largest multinationals, economists, investors, entrepreneurs, scholars, journalists, artists, and athletes. Readers will, of course, find essays here on the strengths and weaknesses of India’s political system; growth prospects for India’s economy; the competitiveness of Indian firms; and Indian foreign policy. Other contributions
explore how India might harness the power of new technologies, improve its infrastructure, expand access to health care, revamp its educational system, rethink its energy strategy, and halt destruction of its environment. But there are also essays on “softer” topics such as Bollywood, cricket, Indian cuisine, chess, classical dance, and India’s bid for a stronger performance in the Olympics. The result, we think, is a collection of ideas and expertise without parallel in any other volume.

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