India is the guest of honor at the July 14 parade. Paris is indeed seeking to strengthen its military and diplomatic relations with the most populous state in the world. But this newfound love for India pales in comparison to the attention the United States gives to the subcontinent. Despite a tumultuous history, with India in the 1970s and 1980s clearly displaying its closeness to the Soviet Union, Washington’s deliberate choice, initiated under President Trump and continued under President Biden, to decouple the Chinese and American economies has raise the rating of the Indian-American couple.
The Indian miracle on which Narendra Modi is surfing successfully is the fruit of a belated but resolute conversion to the market economy and globalization, in 1992, under the impetus of the Minister of Finance at the time, Manmohan Singh. It only became significant in the eyes of the world in recent years, so much did the subcontinent suffer from comparison with its Chinese neighbour. While India had a higher GDP per capita than China in 1990, it is almost five times lower today. But the outlook is now reversed. Annual growth over the decade 2022-2030 should be 6.3% in India against 4.3% in China. The latter has already been doubled in terms of population, and the average age there is ten years higher, 38 years against 28 years in India. At the end of June, Indian Prime Minister Narendra Modi was in Washington, where he met President Biden and delivered a speech to Congress, which widely applauded him, on both the Democratic and Republican benches.
The growth of the Indian technology sector started in the 1990s, when India became a major player in IT outsourcing. With the establishment of technical education through the Indian Institutes of Technology in the 1950s and 1960s, the country was able to rely on an English-language educated workforce at low cost. This industry has encouraged an ecosystem of dynamic start-ups, some of which have international activities (Freshworks, Zoho, Icertis, etc.). The number of Indian unicorns rose in three years from 40 to 108, approaching that of Europe (128).
Close collaboration
India, it is also many talents who emigrate. In 2021, Indians accounted for three quarters of all H1B visa allocations in the United States. The leaders of Alphabet, as well as its subsidiaries Google Cloud and YouTube, Microsoft, IBM, Adobe and SAP were born in India. The Indian diaspora in the United States now numbers more than 4 million people. They have become the highest paid and most educated ethnic group in the country. This proximity between the two nations has taken a political turn in recent years, India being called upon to choose which technological partner it wants to give priority between the United States and China, two almost identical trading partners, the exchange of goods and services amounting reciprocally to 190 and 130 billion dollars.
The choice is made. In 2020, after a series of border disputes with China, the Indian government banned dozens of Chinese apps, including TikTok. The same year, Meta took 9.99% of the telecommunications operator Jio, which disrupted the sector by offering high-speed data services at low prices, for 5.7 billion dollars.
Since then, signs of close collaboration between the United States and India have multiplied, in both military technologies, India belonging to the Quad strategic body with Australia, Japan and the United States, than civilians. The US-India Initiative on Critical and Emerging Technologies, announced last year, has strengthened the links between innovation ecosystems.
Biden and Modi thus announced new defense collaborations and an agreement that will allow US Navy ships to undertake major repairs in Indian shipyards, despite the significant export restrictions on India, instituted after India breached the Nuclear Non-Proliferation Treaty in 1998, preventing the free transfer of technology. On the civil industries side, Apple’s choice to make India its platform for assembling its devices, in the same way as China, is a marker of the promising future of “Indiamerica”. In 2027, half of the world’s iPhones should be produced there, compared to less than 5% today.
* Robin Rivaton is CEO of Stonal and a member of the scientific council of Fondapol