The Indian Economy Blog

Aaditya Mattoo, Deepak Mishra and Ashish Narain, in the Times of India, on the problem and solution for Indian agriculture:
So, here’s the paradox: the hard-working Indian farmer — one of the world’s low-cost producers — is unable to compete globally.
What is hobbling the Indian giant? A recent World Bank study finds that the biggest problems [...]

Anyone who writes about there being “two Indias” is necessarily wrong. Anyone who describes India’s jettisoning of the licence raj in 1991 using words like “neo-liberal” is necessarily confused. And anyone who writes about Indian agriculture quoting P Sainath and no one else is necessarily unbalanced. Rajinder Sahota, writing in the Financial Times (they actually [...]

Contemplating a ban on iron-ore exports is absurd

The bulk of India’s iron-ore exports last year went to China. This is being bandied as something sinister by those who dislike China because of geopolitical reasons and by those who dislike selling ‘our’ ore to ‘them’ instead of letting ‘our’ manufacturers have it.

1. So why do Indian [...]

Ajay Shah alerts us to a draft volume published by the World Bank (free download) titled Dancing with Giants: China, India and the global economy.
Drawing upon the latest research, this volume analyzes the influences on the rapid future development of these two countries and examines how their growth is likely to impinge upon other countries. [...]

Bhavya Khanna relates a fascinating explanation:
Nehru in his often stated brilliance imposed severe restrictions on the trade and price of Gold in India. The sheik of Dubai had free trade in Gold, and was well, a smuggler’s paradise. Combine the two and you have possibly the largest movement of illegal gold trade in the 20th [...]

In an op-ed in today’s Wall Street Journal (subscription required), Richard Wilder & Pravin Anand claim that
India is rapidly evolving into Asia’s innovation center, leaving China in the dust. Its secret weapon? Intellectual property-rights protection. In recent years, New Delhi has taken big steps to protect these rights, and the results have been dramatic.
[...]
… [...]

The media “controversy” over offshore outsourcing subsides
Angry rants and dismal laments about offshore outsourcing are joining over-excited Internet revolution articles from 1999 in the dust-bin.
As we’d predicted.
Greg Mankiw , who’s experienced the outsourcing sturm und drang first-hand, points us to this David Leonhardt article in the New York Times:
A few years ago, stories [...]

Back soon folks.
Till then, links to some great reading
- Larry Summers’ speech at the Reserve Bank of India on 24 March, 2006
- Edward Leamer’s review of Thomas Friedman’s The World Is Flat
- Our friend, Joydeep Mukherji’s paper for the Center for the Advanced Study of India at U. Penn, titled Economic Growth [...]

Make way for the king
It has already made its way to China. President George W Bush will announce its re-entry into the United States after a long time. The Indian government is making headway opening the doors to Australia, and even hard-to-reach Japan. The Indian mango is beginning to go places.
India is the world’s [...]

Kaushik Das points out the bias in import tariffs, focussing on the automobile sector.
The import duty on foreign vehicles still attracts a 103.39 percent duty, which is unheard of in any developed country.
The steel sector currently has an import duty of 5 percent, which was 45 percent just a decade ago. Despite the reduction, Indian [...]