The Indian Economy Blog

“What’s good for General Motors is good for America” said the the auto-makers’ executives during its heyday, in the 1960s. Not necessarily true — then, and now.

However, is it possible that what’s good for India is good for the US?

Charles Wheelan, in his Naked Economist column on Yahoo, thinks so and cites four reasons to back his claim, starting with the most obvious

1. Because it’s the world’s largest democracy.

2. Because it’s where a large proportion of the world’s poor live.

3. Because a richer India will make for a richer America.

How can a place that “competes” with American companies and replaces American workers make us better off by growing wealthier?

First, a growing Indian middle class will buy our products.

Second, Indian firms will design and sell products that make our lives better.

Reason # 3 is unlikely to see him on the invite list at Lou Dobbs’ parties. And just before the Chinese government print their party invites, they’d do well to read the final reason — a zinger…

4. Because it’s not China.

China has an economy that’s growing even faster than India’s. But China still has some major issues — like the whole autocracy and repression thing.

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China is a geopolitical problem waiting to happen, whether it’s Tibet, Taiwan, encroachment in the South China Sea, selling weapons to nasty regimes, or any number of other problems that stem from being an autocracy on the move. Which brings us back to our new ally in that part of the world: India.

If China is the bad drunk at a party where a lot of liquor is being served, then India is the muscular guy in the corner quaffing mineral water. He looks like a good person to get to know. When the U.S. Ambassador to India David Mulford spoke in Chicago not long ago, he predicted that the U.S.-India relationship will become America’s most important strategic partnership.

Sidebar: Wheelan’s book, The Naked Economist explains economics in a witty, light and eminently readable form. Highly recommended.