It is interesting to note that the current account deficit(CAD)of India is considered to be good for her and the same is an issue for US. Of course the magnitude of CAD of each country is the primary reason of comfort or panic, since a modest CAD or CAS(Current Account Surplus) is not an issue of concern. I always believe that if a country has right investments in mind, which will add a lot of value to the people and nation, it probably makes sense to take on debt (Current account deficit due to flow of capital) and implement the idea as early as possible.
India is attracting the money and it has many important investments which if executed well could catapult India into a very advanced developing nation and would guarantee good returns. Especially the Infrastructure projects which cannot be outsourced and would employ a lot of man power of India. Hopefully the Keynes Multiplier factor effect will kick in for the better of the economy.
Some prudence from the financial minds of the Indian government would be needed to keep the Current Account Deficit modest and not run into a financial crises that hit South Asian countries in 1997-98. Hopefully India will stave off that situation because of its high Forex Reserves.
Talking about US, it's been attracting most of the savings of the world and is not sure of investment ideas which would give a guaranteed high returns. This is because US is already a developed nation and hence has to keep innovating to churn the economy in the positive direction. Higher dependence on innovativeness in the US economy makes it a rather riskier investment destination. It is strange,however, to find that the "Savings Glut", from Germany, China and Japan is diverted towards US. USA is just serving as a broker or a common pool into which all countries invest and then USA eventually invests in developing countries/emerging markets. Probably it's time that countries directly chase the investments in developing countries rather than channeling it through US.
The following article by Swaminathan S. Anklesaria Aiyar, makes an interesting reading in the aforementioned context, Welcome the current account deficit
