INDIA’s positive external orientation started two decades ago with Prime Minister Vajpayee. The growth in the stature of India as an economic entity helped in strengthening economic relations with the developed nations. Manmohan Singh’s stature as a tall economist helped the process of expanding such contacts.
Narendra Modi has been spending his energies reaching out to leaders of an ever-increasing number of nations. Just look at the countries he had visited recently: Maldives, Sri Lanka, Kyrgyzstan, Japan, Bhutan, France, Bahrain, UAE, Russia. After his crowded engagements in the US, he will hold a second summit meeting with Xi Jinping of China in India in October.
In such meetings Modi leaves his imprint of personal rapport as witnessed in his bonhomie with President Trump. How spontaneously President Trump joined the Howdy Modi gala at Houston!
We suggest a unique approach for attempting a Hanuman jump in building infrastructure: Simultaneously inviting several developed countries for building large projects in India with long term financing serviced through exports.
• India has impressed Japan to lend funds over a long term on attractive terms, eg. high-speed rail between Ahmedabad and Mumbai. Can we invite China, which has made rapid strides in bullet trains, to construct two long distance rail systems, eg. Chennai-Delhi and Kolkata-Mumbai, over a short span of three to five years?
• A similar invitation to France, which has an enviable record in its TGV railway system, to do this to link Mumbai with Bengaluru.
• Invite Germany to install 100,000 MW of solar power facilities and large chemical/petrochemical plants.
• India has long years of close bilateral trade with Russia. This can be leveraged to attract massive investments in a range of defence equipment, steel plants…
• With Taiwan and South Korea we can work for similar investments for electronics hardware.
• With USA for mining and oil exploration
• With France and USA for simultaneous construction of several nuclear power plants.
We will have to go for these simultaneously.
Each such large projects will involve investment of around US$ 25-30 billion. 20 such projects will involve around $ 500 billion. Developed countries are in need of trade, investments and jobs. It should be possible to negotiate funding cheap over long term and also to barter Indian goods.
A beneficial fallout: the influx of large numbers of different nationalities, including the Chinese, to construct these would help build closer people-to -people contacts and will contribute to the waning of political animosities. This humongous economic benefit is demonstrated by the centuries-old animosities among European nations disappearing post World War II by the focus on economic co-operation.
In the 1950s the country was keen to add a million tonne steel plant to its then existing capacity of 1.5 million tonnes. There were three offers to construct a million tonne steel plant each – by West Germany, UK and USSR – on soft terms. The policymakers decided to accept all the three offers which helped double the capacity over that then existed in few years!
Such large imports can be paid through exports of agricultural products and other consumer products as barter. The jobs created and the rapid rise in living standards would help India service these large loans and improve government revenues. The time has come for India to attempt a quantum growth in its capacities in a short time. China has proved this possible.
