If China heads for stagnation it may be an Indian century, says noted American experts

With China expected to be headed towards long-term stagnation, it may well be an Indian century if India and the Southeast Asian countries successfully enact pro-market reforms, a group of noted American experts have said.

"China may be heading toward long-term stagnation, but if India and the nations of Southeast Asia successfully enact pro-market reforms, it may well be an 'Indian Century'," said Nicholas Eberstadt, Derek Scissors, Dan Blumenthal and Sadanand Dhume from American Enterprise Institute, a US think-tank, in an essay in Washington Examiner this week.

"Thanks in part to China's slowdown and its unfavorable demographic future, India has a chance to carve out more space for itself in a rapidly changing Asia," the AEI experts wrote.

"A more business-friendly Indian government under Prime Minister Narendra Modi has renewed optimism about a country with more than 1 billion people," it added.

Noting that Washington has several reasons to seek a closer relationship with New Delhi, the four AEI experts said both countries bend over backward to deny that their partnership is aimed at China, but it's no secret that they share concerns about Beijing's rising clout and willingness to throw its weight about internationally.

"India is also an oasis of stability in a region roiled by radical Islam. An uptick of violence in Afghanistan, as well as a surge in terrorism and sectarian killings of minority Shiite Muslims in Pakistan, underscore the relative calm of India," they wrote.

As a model for Asia's smaller countries to emulate, India —-democratic and pluralistic, with a large English-speaking middle class — appeals naturally to Americans.

The thriving, 3 million-strong Indian-American community acts as a bridge between the two countries, they said.

Though the state continues to play too large a role in its economy, the legacy of socialist founders, India also hosts a dynamic private sector that has more in common with its counterparts in the United States and Britain than with China's opaque, state-controlled firms.

"Under the right circumstances and provided it follows the right policies, India could outpace its northeastern rival in coming decades. The United States should welcome this," the essay said.

"At its core, an American bet on India is a bet on its economy. This means the overarching goal of policy toward India should be to help economic reform. At the same time, Washington should strive to deepen trade ties to bind the two democracies more closely to each other," they said.

According to these experts, the US should encourage India to become a more competitive, market-oriented economy as an end in itself, even if specific reforms offer no immediate reward for American firms.

The United States should aim to remain India's top trade partner, counting goods and services and Washington should not allow individual companies to hijack the agenda.