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Modi and modernisation

Emerging markets are returning to favour and India is in the vanguard
September 10, 2014

New Delhi, 17 September - symbols will not come much more powerful than what will be on offer in India's capital city that day. The leaders of the world's two most populous countries - India and China, whose people account for about 40 per cent of the global population - will meet on a state visit. Granted, the two countries' share of global wealth and output is much lower. Even so, put the two together and, at purchasing-power parity, they ring up about 21 per cent of global output. That's more than the 21 states of the European Union can muster; it's even more than the 50 states of the US.

So what India's prime minister, Narendra Modi, and China's president, Xi Jinping, say and agree upon during Mr Xi's three-day state visit could have a real impact. The assumption is that talks will be long on business and trade and short on politics. Most likely, that would be for the best. Long-standing border disputes - ameliorated by last year's Border Defence Co-operation agreement - plus the mutual suspicion that's natural for two would-be super powers occupying the same quadrant of the globe make for an iffy political relationship.

Business and trade offer more scope. India badly needs to modernise and the expectation is that Mr Xi's visit will provide the platform to announce substantial Chinese investment to upgrade India's antiquated railways. Another hope is that something can be done to tackle India's chasmic trade gap with China.

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