10 Apr A Midwest passage to India, Part II
When I last left you, it was in the middle of a week’s trip to India as part of an Illinois trade mission to open up a new trade office in that country. The initial part of the trip took me to Delhi (both New and Old), the ancient capitol of Agra (home to the Taj Mahal among other things). We then moved on to Mumbai (Bombay) for the last part of the trip. I promised to share with you both impressions and key activities that the trade mission performed and achieved.
Perhaps the first impression that you have both in arriving, maneuvering in, and departing from India is the vast sea of people. From the moment you arrive at the airport, proceed to your hotel, try to go anywhere within the cities you are visiting, head for the airport, and even get on the plane, there are huge masses of people.
I should have known when I stepped on American Airlines’ direct flight to Delhi (14 hours 45 minutes going and an additional hour on the return flight) that the packed flight was a premonition of what I would see.
Let’s start off with the fact there are 1.1 billion people living in a land mass about one-third the size of the U.S. To drive home this point, let’s take a look at the analysis below of the largest urban centers in the world:
Leading Metropolitan Centers in the World
|City/Metro Area/Country||Area Square Miles||Population Estimate (millions)||Population Density/sq. mile|
|1. Tokyo, Japan||5,210||35.5||6,760|
|2. Mexico City, Mexico||3,015||22.4||6,433|
|3. Seoul, Korea||4,550||21.8||5,170|
|4. New York City, New York, U.S.A||6,720||18.7||2,790|
|5. Osaka (Kobe, Kyoto), Japan||800||18.6||14,121|
|6. Sao Paulo, Brazil||3,110||18.3||5,897|
|7. Mumbai (Bombay), India||1,680||18.2||10,893|
|8. Delhi, India||570||15.0||26,832|
|9. Shanghai, China||1,514||14.5||9,583|
|10. Kolkata (Calcutta), India||690||14.3||20,805|
|26. Chicago, U.S.A.||7,212||9.4||3,247|
Surprisingly, India, while not possessing the most populous urban center, does have three urban centers in the top 10 in the world. Furthermore, two of the three lead the way in most dense populations.
I have listed Chicago, the largest Midwest City, by way of comparison. Without having known the above facts while I was traveling in India, you could certainly feel the intensity of people around you. I have never seen so many people in my life!
But this tells only part of the story; let’s take a look at a few cogent facts comparing the U.S. to India to gain a better understanding of the differences between these two nations.
India vs. U.S.
|Population||1.1 billion||300 million|
|% under 14 years old||31%||20%|
|% over age 65||5%||12.5%|
|Population below poverty line||25%||12%|
|Life Expectancy||64.7 years||77.9|
|Land Mass||3.3 million sq. km.||9.8 million sq. km.|
|GDP||$796 billion||$13.22 trillion|
|GDP with Purchasing Power Parity||$4.042 trillion||$12.98 trillion|
|GDP per capita (PPP)||$3,700||$43,500|
|Administrative states||28 states/7 territories||50 states/1 district|
|Type of Government||Democracy||Democracy|
|Labor Force||509.3 million||151.4 million|
|Exports||$112 billion||$1.024 trillion|
|Imports||$187.9 billion||$1.869 trillion/td>|
|Key Trade Partners (exports)||U.S. (16.7%)||Canada (23.4%)|
|UAE (8.5%)||Mexico (13.3%)|
|China (6.6%)||Japan (6.1%)|
|Singapore (5.3%)||China (4.6%)|
|Telephones – landlines||49.8 million||268 million|
|Telephones – cell||69.2 million||219.4 million|
|Internet users||60 million||205.3 million|
|Roadways||3.4 million km (53% unpaved)||6.4 million (36% unp.)|
Source: “The World Factbook” – www.cia.gov
I promised you some impressions as well as comments that I picked up during the trip; here we go:
Although India has double the level of poverty of the U.S., this is somewhat misleading. While there, we heard that at least 300 million people live on less than $2/day per person (imagine a whole country the size of the U.S. living at that level of poverty). Having said that, there is also a fast-growing and rising middle class, which is estimated to be at least 200 million to 300 million people in size, and where the average income level is about $13,000 per year. This group has rising expectations for things such as cars, real estate, travel, and disposable goods and products.
So where do the rest of the 500 to 600 million people fall in? Probably most earn above the poverty level and make a living in the countryside in the agrarian sector. There is a small but also growing wealthy class. I haven’t seen any numbers, but if one took the top two percent of the population, some 20 million to 25 million people, you would have the upper middle class to the upper class of Indian society, where you are seeing signs of conspicuous consumption and wealth.
The wealthy class is growing due to technology-based companies, much as our Silicon Valley has spawned wealth. In spite of all the poverty, a couple of things struck me: there were not as many beggars as I thought I would see; everyone was very friendly; street vendors were very persistent in trying to relentlessly negotiate deals.
Watch out, Hollywood
The Indian version of Hollywood, the heart of our entertainment complex in the U.S., is “Bollywood,” located outside of Bombay (where Bollywood gets its “B”). This industry is getting increased international recognition and churns out 250 to 300 films a year versus the 50 or so films produced in the U.S. I flipped on Indian TV one night and sat through a good portion of the Indian version of the Emmys and it was remarkably similar to its U.S. version.
The newest Indian movie to hit the U.S. shores, “The Namesake,” appropriately addresses a Bengali family which emigrates to the U.S., raises a family here with all of the struggles to culturally adapt, takes the family back to India for visits and re-acculturation, and then watches as the children grapple with their dual cultures. It is a well-crafted movie and had some great shots of the Taj Mahal, which once again reminded me of the magnificence of this incredible temple built over 400 years ago.
As the numbers attest to above, India is clearly lacking in all kinds of infrastructure, but particularly urban infrastructure. It is impossible to traverse major cities in less than one hour during the day. Streets are clogged not only with the sheer mass of people but reams of taxis consisting of modified golf carts (my terminology) that hold anywhere from three to six people (don’t ask me how) and what looked to be Indian knock-offs of a 1960s style, four-door Peugeot. Forget about modern taxis.
Although there were signs of new highways and “flyover” construction (the Indian terminology for overhead highways), generally speaking there is a lack of good highways. It took us 4-1/2 hours to navigate about 100 miles from Delhi to the ancient capitol of Agra (home of the Taj Mahal) on a four-lane road, which was filled to with motorcyclists, bicyclists, other buses, cars, cows (cows are sacred in India and cannot be eaten or killed, and seem to have the right to be wandering everywhere), camels, and even some elephants.
The two major airports we experienced reminded me of the old airports of Latin America, although I understand that there are now 15 international Indian airports. I did not see signs of efficient mass transportation, although I am told that Mumbai has an above ground type of subway.
Having said all of this, there has been a growth of new Indian airlines as deregulation of this industry has happened. We took a new airline, Kingfisher Airlines (the same owner as the well-known brewery) for the two-hour flight from Delhi to Mumbai, and the planes were new Airbus – Boeing, where are you? – and the service was excellent with hot meals both ways as well as multichannel TV.
With the growth of the Indian middle class and overall foreign direct investment, it appears that Indian air travel is poised for significant growth (both internal as well as to/from India). I am actually kind of surprised that more U.S. airlines have not jumped into the Indian market. The only ones currently offering direct flights are American from Chicago and Continental from Newark. The airports will need a significant facelift if they are going to be able to handle this upsurge in travel. Getting back to infrastructure, another major missing ingredient is hotels.
A comment that I heard was that there were more hotels in Las Vegas than all of India. While I can’t attest to this, there did not seem to be a huge amount of hotels and as a result, the major chains present charge New York City and London-level prices: surprising in a country where everything is generally inexpensive. To show Chicago loyalty, we stayed in two Hyatts: the Grand Hyatt in Mumbai was spectacular in design and service – unlike any U.S. Hyatt I have ever seen.
These are just a few of my impressions – I could probably write a much longer series if I incorporated all of what I saw over the eight days.
Trade mission at work
We had numerous meetings in both Delhi and Mumbai, including:
• U.S. Ambassador, U.S. Consul General (Mumbai), Economics Attaché, Agricultural Attaché, and others.
• The Fulbright Foundation which fosters educational ties between the two countries ( a lot of interest in the University of Illinois).
• The Indian Federation of Chambers of Commerce (FICCI) – sort of like the Chicagoland Chamber of Commerce on a larger scale.
• The Council of Science and Industrial Research : the Indian equivalent of the National Institutes of Health with 18,000 employees including 5,000 scientists in 38 different labs.
• The Secretary for Biotechnology in the Ministry of Science & Technology.
• The Bombay Stock Exchange.
• The State Bank of India and YES Bank (the latter an investment bank involved in the Pharma and biotech sector).
• The Secretary of Industries, Energy, and Labour, for the State of Maharashtra (where Mumbai is located), which is the main industrialized state driving a lot of the Indian economy.
• American/Illinois companies in India such as Motorola, Abbott Labs, and Ernst & Young.
• So what does this all mean for Illinois and the Midwest? Well, there was high interest in the following areas:
• Energy in two areas: coal utilization (coal gasification producing “clean” coal) given the large deposits in both Illinois and India, and biofuels.
• Agriculture, particularly on increased Indian productivity. This an area requiring vast reform.
• Education. There is a huge Indian thirst for MBAs, engineering, Ph.Ds, and U.S. universities are major recipients of Indian students.
• Real estate, which is currently booming with annual growth of 35 to 40 percent per year due to the limited space and antiquated zoning laws. This extends to all types of real estate including bioparks.
The mutual interest in the above areas will hopefully drive some future memorandums of understanding between Indian institutions and Illinois which can increase further activities between the two countries. Given that Illinois already has the third largest Indian population in the U.S., that itself may be a main driver of increased activity between the two regions.
A fascinating trip and grist for many future articles! See you soon!
Previous articles by Michael Rosen
• Michael Rosen: Indian trade possibilities boggle the mind
• Michael Rosen: A Midwest life-science odyssey comes full circle
• Michael Rosen: Bioscience clusters: Too many or room for more?
• Michael Rosen: The deconstruction of “Big Pharma”
• Michael Rosen: The 10 biggest events shaping biotech in 2006
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