Spiga

INDIANS are coming

“Last Friday, India and the United States agreed to sign a historic agreement on scientific collaboration. This agreement has been fought over for ten years. But now, according to Indian science and technology minister Kapil Sibal, the pact covering healthcare, biotechnology and nanotechnology will be signed when he visits Washington in October.

“The US and India have never been the best of friends. In fact, annual trade between India and the US stands at a paltry US$22 billion. The new pact that’ll be signed in October has the potential to increase this number several times over. What exactly will it mean for US investors?

“The agreement will have the United States help India set up a body similar to the US Food and Drug Administration. This means that any drugs approved in India will win automatic acceptance in the US market. Can you imagine how effective drug development will become if the FDA has a cheap, streamlined sister organization in India? This will see US companies farming out drug trials to India - and benefiting from a whopping 50% cost savings! That alone could be enough to launch India into the portfolio of every American investor.

“Look at India’s demographics, on the other hand, and it’s easy to see why Indian investments are so explosive. India is the fifth-largest economy in the world (ranking above France, Italy, the United Kingdom, and Russia) and has the second-largest GDP among emerging nations. An amazing 25% of the people in the world under the age of 25 live in India. In fact, 50% of India’s total population is under 25 and 80% is under 45. This means India has a middle class that exceeds the population of the USA!

“That’s why both DeHaemer and I think that India’s exploding population of low-cost, high-IQ, English-speaking brainpower will without question have a far-reaching effect on your investment dollars. Case in point: Business Week reports that there are now more IT engineers in Bangalore (150,000) than in Silicon Valley (120,000)! Whether you regard the trend as disruptive or beneficial, one thing is clear: American companies that have shifted work to India have cut costs by 40% to 60% - affecting everything from your iPod to your Yellow Pages.”

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