AGRICULTURE Sukhjit Singh Aulakh at his farm near Jalandhar India is the world's largest producer of farm commodities, and the second- largest producer of fruits and vegetables. Yet, less than 2 per cent of its fruits and vegetables are processed. Simply organising the farm supply chain can transform fortunes of the farmers.

From atop Sukhjit Singh Aulakh's Farmtrac 60, life looks just as it should: beautiful. The winter sun is warm and golden, and his 52-acre farm in Adampur near Jalandhar is lush green with promise. The 40-day-old potato crop is coming along nicely; a huge tract of sugarcane has already been cut, and the rest will reach the market too in a few days. The 39-year-old Aulakh's two children-a 11-year-old son and a four-year-younger daughter-go to a "convent" school ("It's not top-class, but it's good," says the man), and his two brothers work in Canada, where Aulakh himself worked before returning to India to manage affairs after his father's death. It's been eight years since, but the trendy Aulakh-dressed in Levi's sweatshirt and jeans, and Lotus Bawa sneakers-has "no plans of going back to Canada".

Why should he? Since the early 90s, the Pepsi contract farmer's yields have soared. Earlier, his farm used to produce nine tonnes of potato per acre. Now-with help from Pepsi's agri-scientists-it is 20 tonnes-plus. In the mid 90s, he'd be happy if he eked out 2.5 tonnes of red chilly per acre. Now he gets three times that, but believes his potential as a farmer is still not being tapped fully. "If we get marketing help, we can take on any country in potato and wheat in the global market," says Aulakh.

Replace the name Sukhjit Singh Aulakh with India, and you might as well be looking at a metaphor for modern India. Despite the general pessimism around, things are getting better every day. Its $478 billion (Rs 22.94 lakh crore) GDP may rank a distant twelfth, but it is the second-fastest growing among the top economies. It may have the world's most poor, but every year the country graduates an estimated five lakh engineering and technical students-all potential global workforce. India's 56-year-old democracy, despite its paralysing politics, is one of the strongest in the world. Its consuming middle class of 300 million is bigger than the UK, Germany, France and Italy combined.

That's not all. India has the highest arable land in terms of land-to-size ratio, it is the second-largest producer of fruits and vegetables, and it has the highest area under irrigation. Of natural resources, the country has everything from iron ore to gas. And over the last decade, the country has increasingly occupied a greater share of world consciousness. Be it the recognition of India's software talent, back-office operations, sourcing of manufactured products, or merely Aamir Khan's blockbuster Lagaan. Nobody can deny that India today is much stronger, a more forceful member of the world economy than it ever has been since the eighteenth century. There are more Indians than ever occupying important corporate, academic, and research posts globally.

CONSUMERISM Consumers throng Mumbai's Crossroads India's middle class of 300 million is bigger than the countries of the UK, Italy, and France combined. Growing prosperity will make it one of the world's biggest markets for everything from cereals to cars.

And now at least one man thinks it is possible to grow its $478 billion (Rs 22.94 lakh crore) GDP, which grew at 5.4 per cent last year, into a $9 trillion (Rs 4.32 lakh crore) economic powerhouse by 2020. At FICCI's recent 75th AGM, the man, Mukesh Ambani, Chairman and Managing Director, Reliance Industries, spelt out how. "We can realise the vast untapped potential of our people if we clearly identify the decisive parameters of what we want to achieve," he told his audience.

Rays of Hope

It's easy to mock at Ambani's or anybody else's vision of greatness for India. After all, the economy's ills are so painfully obvious. Indian companies pay one of the highest rates of interest. Power is not only expensive, but its supply is poor and erratic. National highways are potholed and congested, and the ports take forever to ship things out. Custom houses are dens of greed, and bureaucracy both apathetic and corrupt. On an average, labour is cheap, but its productivity-at least in the manufacturing sector-is one of the lowest in the world. The good news: all these issues are addressable, and some have been since the early 90s. Says Amit Mitra, Secretary General, FICCI: "Just look at the distance India has travelled since 1991."

MANUFACTURING A chemical plant: Latent potential Indian manufacturers may be at a disadvantage in terms of capital cost and infrastructure, but there is tremendous potential in labour-intensive industries, whose exports-according to Accenture-could soar from $12 billon to $57 billion by 2006.

Indeed. Since then, the GDP has grown from Rs 6.93 lakh crore to Rs 22.94 lakh crore. Exports have zoomed from Rs 44,000 crore to Rs 2,09,017 crore; foodgrain production has jumped from 176.4 million tonnes to 211.3 million tonnes; poverty level has gone down from 37 per cent in 1993-94 to 26 per cent today; power generation, despite its troubled history, has increased to 113,000 mw from 74,700 mw in 1990-91; teledensity has quadrupled; and the stockmarket capitalisation on the Bombay Stock Exchange has risen to Rs 6,01,289 crore, from Rs 3,54,106 crore in 1991.

All that has been possible because 12 years ago, India decided to end more than 40 years of economic isolation and join the global mainstream by delicensing industries and inviting foreign investment. That has helped Indian industry focus on improving its own competitiveness rather than chasing licences and approvals as it did until then. Therefore, more companies than before are hiring consultants to deploy global best practices. Chambers of commerce, especially CII and FICCI, are on an overdrive on a range of issues-from plain networking within and outside to cluster development to policy-level changes. Newer opportunities in the knowledge industry have opened up-from BPO to engineering design to biotech. Says Surjit Bhalla, MD, Oxus Investments: "I am very bullish about Indian companies. Finally, they seem to have got their act together."

The Knowledge Economy

ENTREPRENEURSHIP M.K. Dhir of Dhir Global Industria A new breed of entrepreneurs in both old and new economy is tapping top-of-the-line opportunities globally. Dhir, for example, makes Hugo Boss suits at the only facility of its kind in Gurgaon.

If China, over the last 20 years, has established itself as the factory to the world (it exported $266 billion, or Rs 12,76,800 crore, of goods and services last year), then India could become the back-office and laboratory to the world. Why? Because of its human capital. According to Nasscom, some 19 million students are enrolled every year in high schools and about 10 million in graduate courses across India. Another 2.1 million graduates and 0.3 million graduates pass out of non-engineering colleges annually. Even at current rates, Nasscom estimates, about 17 million potential employees will be available for the IT industry alone by 2008.

More importantly, the shift in IT-related work to India continues. According to research outfits such as Giga Group and Forrester Research, the global slowdown and cost cutting will increase outsourcing and offshoring in India's favour, although there are new competitors on the market including China, Ireland and Israel. A Nasscom-McKinsey report projects revenues from it services and it-enabled services at $57 billion (Rs 2,73,600 crore) by 2008, and employment at 4 million. At least two companies, Tata Consultancy Services and Wipro, are near the $1-billion (Rs 4,800 crore) revenue mark. What's significant also is the value-added work that Indian it players have begun focusing on. The tier-one vendors, for example, are looking at business transformation work. There are smaller companies such as Pramati Technologies, Moschip Semiconductors and i-flex Solutions that have taken the product development route, which will lend a face to the largely anonymous work the industry does.

INFRASTRUCTURE Golden quadrilateral (below) is a success story India needs about $200 billion to pull up its infrastructure to internationally acceptable levels. The good news: Projects like the Golden Quadrilateral prove that a quantum leap is possible.

Pharma and biotechnology are other industries where India could become a global force. According to another McKinsey estimate, the pharma industry has the potential to become $25 billion (Rs 1,20,000 crore) big by 2010, and $100 billion (Rs 4,80,000 crore) in 15 years thereafter. The opportunities lie not just in bulk drugs and generics, but in research and development, especially in the area of bioinformatics, genomics and proteomics, and data management. Already, the Indian biotech industry is about $3 billion (Rs 14,400 crore) big, but most of the work is focused on low-end products like vaccines and not the more value-added work in the areas of proteomics or genomics. Bioinformatics, which marries the power of computing to biotechnology, alone promises to be a $20-billion (96,000 crore) global industry by 2005, and India could enjoy a significant share of it.

A clutch of Indian companies, including Strand Genomics, Avestha Gengraine, and Kshema Technologies, has hopped on to the bioinformatics bandwagon, and by all indications they are well positioned to win. India not only offers cheap qualified manpower (according to some estimates, at one-third the global cost), but also a wide array of research sample. Then, there are remote service opportunities in contact centres and remote detailing. McKinsey estimates that India can turn remote opportunities into a $275-million (Rs 1,320 crore) business by 2010. Says Renuka Ramnath, CEO, ICICI Ventures, which has invested in a bevy of Indian biotech companies: "I think India has some clear advantages in this industry, and we are very bullish about it."

That optimism could well be extended to the pharma industry, where generic drugs are prying open lucrative global markets. In fact, India's first multinational may well come from this industry in the form of Ranbaxy Laboratories. But there are other equally aggressive players here, including Dr Reddy's Labs and Cipla, who are using their years of expertise in reverse engineering to launch off-patent drugs, and even new molecules. The advantages here are, again, costs and manpower.

TELECOMMUNICATIONS India's new generation will be digital The explosion in telecommunications should hasten India's integration with the world markets, and throw up new opportunities for remote work.

BRAND INDIA The global Indians are now stuff of movies Since the Nineties, India has occupied a greater share of world consciousness and gradually the Made-In-India tag is becoming more acceptable.

Pay Dirt

At this point, the knowledge-based industries may look more promising, but there is no reason to ignore the old economy sectors of manufacturing and agriculture. Rather, the objective should be to unlock the potential in both these sectors. And of that, there's plenty. Take agriculture, for example. India has the highest percentage of arable land, the highest area under irrigation, is the world's largest producer of farm commodities, and the second-largest producer of fruits and vegetables. The irony, however, is that it is a marginal player in the world agri-trade, with 1.2 per cent share of the $500-billion (Rs 24,00,000 crore) world trade. Similarly, less than 2 per cent of the fruit and vegetable production is commercially processed.

If India invests in cold chains, and helps farmers with pre- and post-harvesting technologies, this wastage can be turned into hard cash. Ambani of Reliance used a simple calculation to drive home the potential. Israel, he pointed out, produces $4 billion (Rs 19,800 crore) of agri commodities on just 1 million acres of land. By that measure, India's agri-sector could churn out $1.9 trillion, or Rs 91,20,000 crore, (that's four times our current GDP) in revenues. Fine, there are a number of issues relating to pricing, distribution, and both tariff and non-tariff barriers. But these can be resolved-if the government decides to.

A lot of people are beginning to write off manufacturing. It would be a disaster to do so. For two reasons. One, three-fourths of India's working population is still blue-collar, and will continue to remain so in the short term. The services sector does not have the potential to make up for whatever job losses a reduced focus on manufacturing could lead to. Two, not all manufacturing companies are globally uncompetitive. So what does it mean? That it is possible for companies to make up for disadvantages in terms of capital or infrastructure costs through process improvements. Let us not forget that it took Japan more than 25 years to make its mark globally, and China about 20. India has invested less than 10 years in putting its manufacturing house in order, and the short learning curve of some of the companies could mean that they make it to the world stage sooner than most expect. Besides, India does not have to manufacture high-end products like semiconductors or aeroplanes. It can do a damn good job of manufacturing CDs, footwear, garments, chemicals, and components, and take shares away from existing rivals. After all, government policies have little to do with things like reducing quality defects or improving design. That's precisely why not all companies in Japan are Toyotas or Sonys.

India enters the new millennium with a powerful advantage on its side: the realisation that it can and must become a global economic superpower. Still, should the first decades of the millennium see India regress into global economic irrelevance, it will be because it chose to. And not because it didn't have the chance, or the wherewithal, to win.