According to Morgan Stanley’s chief economist, Stephen Roach: “India is on the cusp of something big.” Roach professes to be as excited about India as he was about China in the late 1990s. The source of this excitement is the country’s burgeoning consumer sector, which, as a share of GDP, is already higher than that of Europe, Japan and China.
Athough, in absolute terms, India’s per capita income and consumption levels are about half those of China’s, it is the pace at which private consumption is growing, and its dynamic effect on economic growth, that prompts Roach’s excitement. He even goes so far as to predict that India might play a key role in addressing global imbalances arising from one of the few nations that can still outspend the Indians. “Global rebalancing will not occur as long as the world remains hooked on one consumer – the American consumer,” says Roach. “Think India if you want a way out of that trap.” It’s time perhaps for the East Asians to rethink their sales strategies.