With its stable democracy, youthful motivated population, world class school system, use of English as primary language, fair legal system, global affluent alumni, favorable government policies and hard-dollar revenues being continuously pumped in by the explosion of global outsourcing, India is poised for extensive growth.
Global "business process outsourcing" and the shift of labor to lower cost population centers as well as falling telecommunication costs and the internet have created new revenue streams which are being pumped into the pockets of a new generation of young, hungry and upwardly mobile employee/consumers; these brand new affluent local consumers are demanding better living conditions and access to the finer things in life. Local basic industries, like retailing, banking and finance, automotive, infrastructure, healthcare, hospitality, media, steel, cement, real estate and consumer electronic goods are all enjoying explosive growth. Many new businesses have sprung up to serve this emerging class of newly affluent people, and they are creating a heavy incremental demand for growth capital.
"Business process outsourcing" started with the more developed countries offloading the menial tasks they no longer had any wish to perform to Indian companies who could do them more cheaply and effectively. The Indian companies executing these mundane tasks have at the same time been studying and improving these processes, while always seeking to move up the complexity chain to take on more and more higher level processes.
Indian companies are not passively sitting on their hands content to just take the low end jobs being outsourced—they are instead using the low end jobs to build and ultimately repackage intellectual capital which can then be taken back out and used to compete with the very multi-national companies who outsourced to them in the first place. They have access to much cheaper intellectual capital than most developed nations, and they are clearly highly motivated to advance.
In the 1970s and 1980s, Indian nationals were second only to the Taiwanese as recipients of US PhDs in engineering and science. Many Indian entrepreneurs came to the US and made their fortunes in Silicon Valley; they are now reverse emigrating or at least having homes in both places and commuting back and forth. This emerging “transnational community” is a powerful force for continued rapid development, as the returnees bring back with them management skills honed in the competitive developed nations' economies as well as a plentiful supply of new capital for domestic investment.
India is one of the few places on earth where the average age of the population is still declining. Today, over ½ of the current population of 1+ billion people is under 24 years of age. There is a youthful energy and vibrancy to the economy that is lacking in most of the more developed countries globally. Indians today are young, motivated, upwardly mobile and very smart, and have graduated from the now world class Indian School system.
India has maintained a democratic and smoothly functioning political framework since declaring its independence in 1947. India’s judiciary is formally independent, and is considered to be as fair to foreigners as it is to local interests.
Past Indian governments had earned a reputation for impeding foreign investment with tariffs, investment caps and tons of red tape. Recent successive Indian governments, however, have repeatedly emphasized—both in speech and actions—their openness to foreign investment and their goal of raising foreign investment inflows.