'Asian markets offer opportunity for growth'

Asia’s ability to withstand the global slowdown and sustain higher rates of growth offers an opportunity to grow for India if the country can tap into these markets, according to Sanjaya Baru, consulting fellow at the International Institute of Strategic Studies, London, and former media adviser to the Prime Minister.

Delivering R Kothandaraman Birth Centenary Lecture here on Wednesday, Baru said the India-Asean free trade agreement, signed recently, offered a new opportunity for the country to tap into the Asian markets.

He, however, said that Indian manufacturing and services sectors had to become far more efficient and productive than at present to benefit from this opportunity. Low labour cost alone would not offer India a competitive edge in markets where brands and brand images have become important.

Baru pointed out that Asia’s consumers were becoming increasingly quality conscious and Indian manufacturing has some way to go in acquiring a reputation for good quality. The benefit of ‘Brand India’ from the information technology story had not translated into an improved image for Indian manufactures.

Similarly, he said, the image of urban India, of India’s infrastructure and services sector, its airports and municipal services, the power situation and the quality of urban life must improve in a short time frame for Indian exports to gain access to Asia’s new markets.

Baru emphasised that our growth strategy must depend far more on domestic sources of growth in the medium term, even as we tap into new and emerging market opportunities worldwide.

Nevertheless, he said that without a new wave of output and productivity growth in agriculture, along with sustained improvement in rural incomes, it would not be possible to sustain the domestic market growth of up to 8 per cent.

The lecture was organised by the Hyderabad Management Association.