South Asia: India, Giant of the Subcontinent - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 239

commuter trains during rush hour in 2006 killing 200 and
injuring 700 others. The fact that the trains were running
again in six hours was amazing, but people complained
about the state' s utter failure to coordinate relief efforts.
Indiablames Pakistan for these and subsequent attacks.
Kolkata now anchors an industrial district that fo-
cuses on jute and cotton manufactures, engineering, and
chemical industries. Coal mining and related iron and
steel manufacturing center on Nagpur. The region incor-
porating Maharashtra and Gujarat specializes in textiles,
food processing, chemicals, and engineering.

vices Index,” which evaluates 50 countries according to
their financial attractiveness, skilled-labor supply , and the
business environment. India tops China because of signif-
icantly lower wages, infrastructure, and regulatory costs.

THE NEW CONSUMERS
According to a National Research Council study in New
Delhi in 1994, India' s consumers can be divided into five
classes:

The “very rich”—6 million people or 1 million
households
The “consuming class”—150 million people (half
the bloated, conventional estimate)
The “climbers”—the lower-middle-class of
275 million
The “aspirants”—275 million (who would be clas-
sified as poor in Europe or America)
The “destitute”—210 million

INDIA 'S SILICON V ALLEY
Chennai, specializing in textiles and light engineering,
has expanded into India' s southern industrial region,
which incorporates what has become known as India' s
Silicon V alley , centered on Bengaluru (Bangalore). Ben-
galuru' s story illustrates some of the problems and trends
in modern economic development in India.
Bangalore, an army cantonment during the Raj, later
became known as India' s Garden City . In the 1980s, a
spate of colleges and skilled workers, along with a pleas-
ant climate, drew the attention of foreign corporations.
Multinationals like Lipton T Tea and Unilever, and Ameri-
can firms such as T Texas Instruments, IBM, and Dell
opened plants in the area. Indian companies such as In-
fosys and Wipro have become highly respected multina-
tional corporations.
The 1990s brought more companies, stores, high-
end shopping malls, and restaurants. Then an array of
woes ground the city to a halt. Population increased from
2.9 million in 1981 to more than 6 million in 2009. Now ,
there are shortages in supplies of water and electricity .
Cars and motor scooters vie with pedestrians in a
dangerous rat race. Bengaluru is now one of India' is most
polluted cities.
Suburbs are built and occupied before service facili-
ties are installed. Commuting times have doubled. Slums
that sprung up to house migrant construction workers
have become permanent. Some say that the city is
collapsing under the weight of its own success. Neverthe-
less, liberalized government policies and continued
availability of highly trained workers, a relatively high
literacy rate (56 percent), the use of English for business,
and a new international airport combine to make Ben-
galuru' s Karnataka State desirable for investment.
India remains the world' s most attractive country ,
ahead of China, Malaysia, and Thailand, for back-office
functions. This is according to A. J. Kearney' is “Global Ser-

Since then, another 100 million have joined these
groups, but the relative balance among these five classes,
despite some progress, has not changed dramatically . The
first three groups are the major consumers of modern
trappings such as appliances, electronics, and Western-
style dwellings (Figure 8-18).
The middle-class is expected to expand to 583 mil-
lion by 2025. Even though most Indians will remain
rural, consumption in urban areas by the rich and
the middle-classes is expected to rise from the current
43 percento 62 percent of the total. If this does occur,
India may overtake Germany as the world' s fifth largest
consumer market.
The Indian mobile phone market is adding more
than 3 million subscribers a month. In 2005, there were
39 million subscribers. In 2009 there were 500 million!
In 2006, Nokia built a new factory in India and before
the plant was completed the company had commitments
for a million phones. Motorola is making India its head-
quarters for sales in emerging markets. Acer, HP , and IBM
are slashing prices to gain their market share. Dell is also
building a factory there. Not to be outdone, China' s
Lenovo has named India its fifth market target. With
computer sales expected to reach 20 million by 2010,
this market is too big to ignore.
The expansion of mobile communications in India is
also driving growth in personal computing. As prices
come down, notebook sales are skyrocketing. While
computer sales rose 30 percent in 2006, notebook sales
rose 168 percent.