A strong Indian economy can guarantee a more stable and risk free world economy. This is being proved these days when Indian capital markets are sterilizing US economy from the brunt of US mortgage crisis. India has been biggest fund source for compensating and
minimizing the losses for big financial institutions trapped in US sub-prime market. The interesting part of the story is that Indian economy and equity markets are still bullish and on a long term positive trend line.

Indian economy has a rare blend of success factors. It has following key factors which guarantee a strong fail safe system: -

a) A large domestic market immune to world market which can sustain growth even in case of world recession. Strong and bourgeoning middle class with its reach not just in Indian or US markets, but involved with all world markets. This class has its reach in Japan, Middle East, Far East, Euro zone, South Asia, South America, and even in Africa.

b) This class of entrepreneurs, investors and intellectuals can very easily shift in any market, economy, and is uniquely adaptive to any system, be it democracy, autocracy, communism, socialism, so on and so forth.

A very strong Indian economy can guarantee these things both for India and for the world: -

a) An alternative platform and economic-system in case of failure of US, Euro or Chinese system. Ideally, a strong India offers and can support entire world in case of recession.

b) An Indian economy can support all the poles and centers of world establishment. It supports a stronger America, a stronger Euro, and stronger ASEAN, and is compatible to all these strategic groups.

Strong Indian Economy, Strong Rupee, Weak Dollar, Weak Euro

This scenario, in the period 2015 onward, looks quite challenging both from Indian as well as world perspective. The balance of trade would shift towards India, and Indian currency would probably assume the role of one of the key currencies in the basket of world currencies. Global payments and exchanges would take place in rupee as well along with gold standards and contemporary Yuan, US Dollar, Euro, and probably Yen.

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* Contributed by: -
Prem Kumar (Finance) & Manvendra Pratap Singh (Marketing),
ICFAI Business School, Hyderabad.