When you need to book your Mumbai USD400 a night four-star hotel room two weeks in advance because all hotels are constantly fully booked, there is surely lots offoreign management interest in the country…

When prime office space in New Delhi is three times the price paid in Singapore, there is certainly a lot of heat in the market.

When you need to hand a minimum of 50% year-on-year salary increase to retain your best Indian staff, there is definitely extraordinary demand for talent.

Is India over-heating? Is it growing too fast? Is it just the flavor of the ‘month’?

I don’t think so. India’s heat is here to stay. It is here to stay for a simple reason. India’s fast growth is still domestic market-driven. Unlike China, foreign direct investment reached only USD8 billions in 2006 Vs a staggering USD 68 billions in the Middle Kingdom. 2006 Indian exports only represent USD112 billions Vs a near trillion dollar in China.

India is at the cornerstone of its industrial revolution. Let’s reflect for a while on what kind of achievements India will be able to accomplish once FDI reaches similar China levels….

Obviously salaries won’t be able to sustain massive yearly increases for too long. The same applies to the commercial property sector. Modern buildings are now popping-up in Mumbai and New Delhi’s suburbs and the current over-joy of easy money will be tamed in a few years.

For now, every industry sector needs its revolution.

- “Show us more green…”

Two third of Indians still live and work in rural areas. Industrialization will bring higher productivity, longer life expectancy and by default urbanization. There can not be economic prosperity with an abandoned rural sector. The last election demonstrates that.

- “Move over Korea; China just watch and learn”

The industrial sector is prone to the most dramatic transformation. A revolution that will be felt all the way from Mumbai to Detroit and from Calcutta to Munich. Indian industrial conglomerates are about to make their presence felt around the world like no other emerging nation has been able to do so far. Indian conglomerates are risk-taking, able to identify and rejuvenate under-valued assets and have proven cross-culture management talent.

- “The next big Indian acquisition? Think Accenture or Bearing Point…”

The service sector still remains today a tiny employer in India. So far less than 2 million Indians are employed in the software and BPO field. The country and the world can easily accommodate 10 times that.

India might be dusty and messy and it surely sends very mixed signals to any first-time overseas visitors in search for the next market growth eldorado. Nonetheless, India is now at the early stage of at least two decades of sustained growth. Two decades that will dramatically reshape our commercial world.

Damien Duhamel

www.clearstate.com