India Economy

Going halfway around the world for a job that pays about $11,000 a year hardly sounds like a great career move for an Ivy League graduate. But for Michael Delfs, the chance to work in India and see the country's economic boom for himself was all the incentive he needed. In August, Delfs, 26, became one of many foreign workers outsourcing themselves to India, following the explosion in jobs in one of the fastest-growing economies in the world.

Going halfway around the world for a job that pays about $11,000 a year hardly sounds like a great career move for an Ivy League graduate. But for Michael Delfs, the chance to work in India and see the country's economic boom for himself was all the incentive he needed. In August, Delfs, 26, became one of many foreign workers outsourcing themselves to India, following the explosion in jobs in one of the fastest-growing economies in the world.

While arguments rage over trade relations with China, U.S. business and government are paying increased attention to another huge country and potential market: India. President Clinton's visit to India later this month will be followed in May by a Commerce Department tour that will bring U.S. manufacturers into contact with Indian business opportunities. India has never been prominent on the U.S. radar screen--not nearly as big and constant an issue as China.

Former Prime Minister P.V. Narasimha Rao, whose free-market economic reforms in 1991 launched India's shift from a bankrupt nation hobbled by socialist policies into a regional economic power, has died. He was 83. Rao died Thursday of cardiac arrest at the All India Institute of Medical Sciences, where he was admitted Dec. 9 after complaining of shortness of breath, said Chetan Sharma, his aide.

Every morning, dozens of bright young Indian men and women battle their way through the madness of India's largest metropolis, choking through snarling, noxious traffic, to reach the front door of what may well be the greatest hope for India's high-tech future. The facility where they work is on the second floor of a rather tasteless concrete structure called Standard Design Facility II in a drab industrial park dubbed the Santa Cruz Electronics Export Processing Zone.

If you want to buy a car in India, you'll have to wait as long as six months. Auto makers can't turn out cars fast enough to keep up with a huge demand fueled by lower taxes, an expansion of credit and, more significantly, a growing Indian economy. India's economy grew 3.8% last year and is expected to grow as much as 5.5% this year. The boom has boosted income and given people the confidence to make big purchases, such as autos, trucks and motor scooters.

Endeavoring to carry this nation to the "second industrial revolution," the government unveiled a budget Monday that, by cutting customs duties, widening rupee convertibility and easing taxes on manufacturers, further integrates India into the world economy.

President Clinton's announcement Wednesday of tough sanctions against India jeopardizes billions of dollars in U.S. trade and investment in that populous nation, a blow to U.S. companies already hurting from the financial crisis in Asia. U.S. government officials and business executives were scrambling to assess the impact of the sanctions, which include a ban on the sale of military goods and technology, a cutoff of U.S.

"The Indian elephant has awakened and begun to dance," Anil Ambani, one of his country's leading industrialists, told a conference earlier this year in the United States. This week, the music changed. A wobbly 13-party coalition--composed of free marketeers, Communists, regional parties and low-caste Hindus--is now in charge after five years that saw India sever a 4-decade-old tradition of quasi-socialism and begin adopting market-driven reforms. On Wednesday, the government of Prime Minister H.

On the day India announced a revolutionary new economic policy last week, opening up to foreign investment and slashing bureaucratic interference as never before in the country's 44 years of socialist history, there were three long power blackouts in Chanakyapuri, the fashionable diplomatic enclave in New Delhi where many of those prospective foreign investors would live. On the monsoon-drenched streets of the capital that day, you couldn't find a taxi to save your soul.

India's earthquake had the potential to knock the country's economy back into the Stone Age, striking in a region that refines 55% of India's petroleum products and makes 45% of its pharmaceuticals. The state of Gujarat, about the size of Nebraska, and its proverbially entrepreneurial 41 million people also manufacture a large share of India's textiles and cut and polished diamonds, which account for about a third of the nation's total exports.

While arguments rage over trade relations with China, U.S. business and government are paying increased attention to another huge country and potential market: India. President Clinton's visit to India later this month will be followed in May by a Commerce Department tour that will bring U.S. manufacturers into contact with Indian business opportunities. India has never been prominent on the U.S. radar screen--not nearly as big and constant an issue as China.

When North Carolina-based Cogentrix Energy Inc. headed for India six years ago, it was both pioneer and pilgrim. Pitching a 1,000-megawatt power plant for southern India that could have created hundreds of jobs in the U.S. and supplied electricity to a key swath of this power-starved nation, Cogentrix's Mangalore Power Co. was one of the earliest believers in India's bold economic revolution. It was among the first official "fast-track" projects in the exciting new market in 1992.

India on Monday unveiled a budget plan that doesn't do enough to spur domestic and foreign investment to reverse the country's economic slowdown, analysts and investors said. Finance Minister Yaswant Sinha's fiscal blueprint not only slows the pace of reform set in the last three budgets, but it reverses some of the opening of India's market to trade by raising import tariffs. "He has run out of ideas to kick-start the economy," said A.K. Kinra, corporate vice president for finance at J.K.

In a sign of spreading international protest over India's recent nuclear weapons tests, the World Bank postponed action Tuesday on more than $800 million in development loans to New Delhi after the United States and its allies threatened to block them. Without specifically mentioning the nuclear testing issue, the bank issued a statement saying it had decided to put off any vote on the four lending packages after several of its board members requested the delay.

President Clinton's announcement Wednesday of tough sanctions against India jeopardizes billions of dollars in U.S. trade and investment in that populous nation, a blow to U.S. companies already hurting from the financial crisis in Asia. U.S. government officials and business executives were scrambling to assess the impact of the sanctions, which include a ban on the sale of military goods and technology, a cutoff of U.S.

The sweating Calcutta rickshaw wallah, the impoverished Bihari sharecropper and millions of other Indians struggling to get by were not consulted about it. But in the long run, they are meant to be the chief beneficiaries. In announcing India's 1994-95 budget this week, and disclosing the next moves in the government's economic reform game plan, Finance Minister Manmohan Singh spoke in detail of tax reform, revenue projections and the need to give stagnating industry a helpful push.

Manmohan Singh may now wish he was a lighter sleeper. Singh, India's finance minister, has submitted his resignation in the biggest financial scandal in his country's history--a move that plunged business and industrial circles into gloom Saturday over the possible departure of the placid, turbaned former professor, dubbed the "messiah" of Indian economic reform.

At a recent economic conference here, one of India's more self-confident politicians was touting the country's bright business prospects to a group of foreigners when the electricity in the room failed. Talking straight through the blackout, Parliament member Rajesh Pilot told the participants, "We are very hopeful."

India's central bank announced a package of measures to defend the rupee after the Indian currency declined 6.5% this month to its all-time low of 38.60 to the dollar. The measures include delaying a plan to lower reserve requirements of commercial banks, absorbing excess money in the financial system and encouraging exporters to bring their earnings into the country sooner rather than later.