India – Emerging Asian Monster ?

Blogger - Amol Dhanvij

India and China unarguably are the most promising economies in the coming years. They share at least two characteristics: Both have population of more than billion people and most importantly, both have vast and expanding ‘skillful’ labour base. Moreover, both the nations share same ideologies and have their respective civilization going back some 5,000 years.

China and India both have shown remarkable economic growth in the past few years. However, when it comes to seaborne trade the Chinese are far ahead than India. Infact there exist a lot of differences between the two Asian giants. For e.g. the overall seaborne trade of China was almost 10 times that of India in the year 2007. The container trade of China was staggering 16 times of India in the same year.

China has about 18,000 kms of coastline with almost 1,400 ports, which means on an average a port at almost 13 kms of coastline whereas India has 7,500 kms of coastline and nearly 200 ports implying on an average a port at 37 kms.

Six of the container ports of China are among the top 20 world class container ports and the overall container traffic handled by China stood at nearly 114 million TEUs whilst for the whole India it stood at 7 million TEUs.

The main reason that can be attributed to the Chinese story is that Chinese economy opened as early as 1978 whilst in India it was in early 90’s. Also, the growth story of China is more on the shoulders of manufacturing and trade whilst for India it depends more on services.

The other reason for this difference is the fact that the processes in India are slow with more of the policymaking regulatory functions in the port sector being centralized whereas in case of China it is more decentralized. The port reforms in china were more encouraged by private partnership and foreign investments, affecting the overall trade picture.

Another reason is port induced infrastructure. Chinese were able to connect and improve their overall connectivity not only in terms of road and rail but also the inland waterways and airports making them an international destination base. India lags in this regard.

Other differences include the overall approach of the Indian and the Chinese governments. For e.g. In China SEZ’s were seen as test reforms which were ultimately adopted nationwide while in India SEZ’s are not regarded as reforms but just another means.

The port sector development in India rests on the overall development and more of the private participation which will bring in more authority and decision-making capability. Moreover, the government should act as a supporting authority in developing the ancillary infrastructure rather than the governing body.

No doubt that India can have its own share of pie and become comparable to China but for the fast paced development, the emerging Asian monster needs to look deep inside its policy making and overall decision making process.