Kolkata: Against the background of increasing paranoia in the whole world at the time of the first anniversary of the 11 September terror attacks in the US, India remains quite calm, considering we are a nation of more than 1 billion people, feels Tarun Das, director-general, Confederation of Indian Industry, and chairman, Haldia Petrochemicals and ACC.

Das was speaking at an interactive session organised by the Indian Chamber of Commerce recently. Commenting that the Indian economy has enormous resilience unlike the rest of the world, he said he could foresee a future where India would lead the world by the sheer strength of its human resources.

"In the next 15-16 years, the rest of the world will be old, while the Indian population will still be youthful. I see India as a global service provider to the world in future," he said. "There is need for India to join the component bandwagon."

Claiming that there is a potential of $9-10 billion in the business of component outsourcing, he said: "There is a need to develop India as a provider of components to multinationals, and that is where the future of the manufacturing sector lies."

Citing the example of Sundaram Fasteners, he said it is a success story as far as supplying components to General Motors is concerned. "This Indian company was adjudged the Vendor of the Year award for five consecutive years for GM among 30,000 other vendors from across the globe."

Admitting that these are tough times around the world, he said developed countries like the US, Europe and Japan have huge challenges ahead. "Much has been said about the glamourisation of China, but the country itself has huge challenges to overcome such as developing its interiors, its infrastructure and a host of other issues."

Commenting on the Indian impatience with the pace of reforms, he said most legislations across the world have to do with votes, jobs, politics and winning and losing elections. "This is true of the US and the European Union (EU) as it is for India, and the halting approach to economic reforms is a universal phenomenon and not just confined to India."

Most developed countries do follow protectionist policies because they do not want to lose elections and the same is true for India, he said. "While the citizens of developed countries have social security, the Indian government has nothing to offer. Therefore, the Indian pace of reforms needs to be slow in order to avoid disruptions due to public strife."

Looking at the future, Das predicted the following:

• India will have a lot more imports than before. But it is heartening to note that India has a huge trade-balance of $6 billion vis--vis the US, but India can expect a lot more imports from China in the future.
• Less soft financing.
• Lesser number of joint ventures, but a lot more foreign direct investment (FDI).
• Lesser number of technological input. There is a need for technological input in the Indian civilian sector.

He said India should aim to be a global component provider as also a global service provider for the future. "There is $9-10 billion worth of outsourcing opportunities in the manufacturing sector, and large manufacturing conglomerates would be a ready market for components manufactured in India."

The other areas that can be expected to receive a fillip in the near future include:

Media: This industry is poised to grow 20 per cent annually with 26 per cent of FDI being allowed in this sector lately.

Entertainment: This industry is expected to boom in the near future, and India will definitely go beyond Lagaan and Monsoon Wedding.

Software: In the next couple of years, this sector will grow at 30 per cent per annum.

Das also said over the next five years, 30 per cent of the population will be buying high-end consumer goods and by that time people who will buy consumer goods in India will be higher than that of the EU. "Another 40 per cent will graduate to the climber class of the consumer. Nine per cent will become aspirants, as a huge demand is poised to happen over the next five years."

By 2020, around 8 per cent of the population will be in the non-consumer class, he said. "India has a vast talent pool, and the cost of manpower is less than 8 per cent of the inferior manpower anywhere else in the world."