India’s prescriptions towards China are driven by a variety of factors. One is competition over natural resources in the Indian Ocean Region, Education factor, nuclear and electronic factor,at a time when securing them has become a core national interest for both nations due to rocketing energy demand.

China is growing fast and with its dependence on foreign investment should it survive on other economies lose steam. India is more self-sustained but is tackling rampant corruption and soaring inflation.

India is also responding with a major military modernization program. Last year, India announced proposals to undertake its largest-ever upgrade of military capabilities along the Chinese border, and to deploy a full squadron of aircraft to a base in Assam, which borders AP.

Delhi remains very concerned about Pakistan, and particularly about the threat of  Lashkar-i-Taiba and other anti-India militant groups that it insists Islamabad cannot or will not rein in. Delhi also remains preoccupied with Islamabad`s nuclear policy. Indians believe that Pakistan has maintained a deliberately ambiguous threat of unilateral first-use that enables it to escalate small battles into nuclear conflicts whenever it wishes.

India is also responding with a major military modernisation programme. Last year, India announced proposals to undertake its largest-ever upgrade of military capabilities along the Chinese border, and to deploy a full squadron of aircraft to a base in Assam, which borders AP.

This is not confined to the IT arena. “India will emerge as a strong manufacturing base,” predicts Janat Shah, a professor of production and operations management at the Indian Institute of Management, Bangalore (IIMB) and founder-chairperson of its Center for Supply Chain Management. Jagdish Sheth, marketing professor at Emory University’s Goizueta Business School in Atlanta, adds that India will become “a second sourcing destination” for the world economy.

The numbers have already started signaling this development. In March, a new United Nations Industrial Development Organization report put India as one of the top 10 manufacturers in 2010. “India tops developing countries (China excluded) in production of textiles, chemical products, basic metals, general machinery and equipment, and electrical machinery,” the report noted. In motor vehicle production, the country has overtaken Brazil and is behind only Mexico among developing countries. India’s manufacturing value added has grown by over 10%, compared to 3.4% for the industrialized countries. The share of China, India and Brazil in world manufacturing output is now 32%, up from 20% a decade ago.