India is moving quickly to capture its place on the world stage. Just 16 years after embarking on the path of economic reform, the country has freed itself from the slow growth that plagued it during the decades after independence; in the past fiscal year1 GDP growth reached a robust 9.4 percent. India’s best companies are targeting global markets, as Tata Steel’s $11 billion takeover of its Anglo-Dutch rival Corus shows, and the Indian consumer is attracting worldwide attention. But to sustain these advances, the country cannot rest. Its leaders must focus on building infrastructure and developing a thriving labor market.
The economic reforms that began in 1991 marked a turning point in India’s economic history. Under the program, the country successfully laid the foundation for robust economic growth by transforming itself from an agrarian, underdeveloped, and closed economy into an open and progressive one that encourages more foreign investment and draws more wealth from services and industry. Real GDP growth averaged 8.6 percent over the past four years, and the country’s economic planners expect it to grow by an average of 9 percent a year through 2012. India boasts companies with world-class capabilities in sectors such as automotive,...