As Bertie Ahern and Micheál Martin were selling Ireland's wares on a trade mission to India this week, a road in Delhi was renamed in honour of Eamon De Valera. Although probably alien to the ascetism of De Valera and Ghandi, the mission's expectations are tantalising: to tap into the market of India's one billion people.
It is also threatening. India's labour force of 450 million is largely English-speaking and low-cost, a competitor for foreign direct investment and a potential magnet for Irish firms to relocate activities.
But this week in India, everyone is accentuating the positive. Colonial rule was not just a shared experience, but left Ireland and India with a common language and legal system, powerful platforms for trade.
It's a good time to build: India's economy is growing by 8 per cent in total terms and by 7 per cent in per capita terms. A spurt of state spending caused a false dawn for the economy in the 1980s, leading to a crisis of confidence in 1991. Since then the policy environment has been stable.
With prime lending rates at 10 per cent India's growth is more impressive than it looks and at 4 per cent, inflation is manageable. At 59.7 per cent of GDP, public debt is high but within acceptable bounds for a developing country. India's trade deficit is not as bad as it looks, when its need to invest in business and infrastructure is considered.
But the microeconomic picture is less impressive. Much of the economy is subject to De Valeraesque protectionism. In 1991, the gap between India's imports and exports reached breaking point. Trade liberalisation was begun in tandem with macreconomic stabilisation. This made domestic industry leaner. According to a recent survey labour productivity in India grew at 4.4 per cent last year, ahead of Ireland, the EU, US and Japan (but behind China).
In 1991, India's economy was smaller than Belgium's and over 40 per cent of its population was mired in poverty. Over a decade later rapid growth has brought many above the poverty line, although 25 per cent of the population remain below it
Protectionism, nonetheless, keeps large swathes of the economy underdeveloped. Agriculture accounts for one-quarter of output, but for over half of employment. Reform of the sector is extremely difficult.
The contrast with the modern, liberalised, sectors of India's economy could not be greater. The Irish trade mission began in Bangalore, the heart of India's burgeoning software industry. The number of students with access to good training in software and engineering is not large relative to the population. But with a population of 1.1 billion, it doesn't have to be. The country boasts some 200,000 software engineers and the number is growing.
Satellite technology allows Indian software engineers to fix bugs, upgrade systems and process data while their EU and US customers - and competitors - are fast asleep. With wages running at $30 an hour, compared to $100 for western engineers, it is small wonder that India's software exports have rocketed from $1.8 billion in 1997 to $6.2 billion in 2002.
India's National Association of Software and Service Companies projects total software revenues will hit $21 billion by 2008. Indian firms are nonetheless emerging from contract or project-based work for foreign clients and into the market for applications development.
What are the prospects for Irish business? With Indian economic growth set to remain at 8 per cent, far-sighted marketing strategies could pay real dividends for firms willing to invest in the long term.
