China’s sharp economic slowdown has raised alarm bells around the world, but it has also thrown into relief the rise of another demographic powerhouse next door. The Indian economy grew at an impressive 7.8 percent annual rate in the second quarter of this year, and on Aug. 23, the country reached an important milestone by becoming the first to land a spacecraft on the moon’s potentially water-rich south pole. Moreover, India’s ascent, unlike China’s, has not been accompanied by an increasingly assertive foreign policy or an appetite for other countries’ territory.
As India’s geopolitical, economic and cultural clout grows, so does its global footprint. China’s “decline,” as some have begun to call the conclusion of the nation’s four-decade-long economic boom, opens new opportunities for the Indian economy, and other developing and emerging countries.
Earlier this year, India reached another milestone when its population officially surpassed that of China, which had been the world’s most populous country for more than 300 years. While China’s shrinking, rapidly aging population is likely to impede economic growth and might curtail its geopolitical ambitions, India — one of the world’s youngest countries, with a median age of 28.2 — is poised to reap a huge demographic dividend.
However, the driving force behind India’s emergence as a major global power is its rapid economic growth. While India’s GDP is still smaller than China’s, it is currently the world’s fastest-growing major economy and is projected to account for 12.9 percent of global growth over the next five years, surpassing the US’ 11.3 percent share.
In addition to fueling a consumption boom, India’s youthful population is driving innovation, as evidenced by the country’s world-class information economy and its recent moon landing, which the country managed to achieve despite a national space budget equivalent to about 6 percent of what the US spends on space missions. Having already surpassed the UK, its former colonial ruler, India’s GDP is poised to overtake that of Japan and Germany to become the world’s third-largest economy by 2030, behind the US and China.
Given its increasingly unstable neighborhood, it should come as no surprise that India has the world’s third-largest defense budget. The deepening strategic alliance between China and Pakistan underscores India’s precarious position as the only country bordering two nuclear-armed revisionist states with expansionist ambitions. Moreover, for the past three years, India has been locked in a military standoff with China along its Himalayan border. Bilateral relations, marked by intermittent clashes in the disputed Tibet-Ladakh border region, are at their lowest point in decades.
By confronting China, despite the risk of a full-scale war, India has challenged Chinese power in a way no other country has done this century. However, despite leaning toward forging closer ties with the West, India remains hesitant to enter into formal military alliances with Western countries.
Western powers are partly to blame. US President Joe Biden’s reluctance to comment on the Sino-Indian military standoff, let alone openly support India, has sent a clear signal that New Delhi is responsible for its own defense. Given that the country’s future growth hinges on its ability to defend itself against external threats, India is likely to step up its efforts to modernize its conventional armed forces and enhance its nuclear deterrence.
The escalating geopolitical rivalry between China and India could also impede efforts to unite the Global South and transform the BRICS group into a credible alternative to the G20 and G7. The BRICS countries —Brazil, Russia, India, China and South Africa — recently agreed to expand the group by adding six new members: Saudi Arabia, the United Arab Emirates, Egypt, Ethiopia, Argentina and Iran. Given the 11 members’ divergent interests, BRICS+ will likely find it even harder to reach consensus on any major issue.
Meanwhile, China’s economic slump could prompt Chinese President Xi Jinping (習近平) to double down on his expansionist agenda. Biden has characterized the stagnating Chinese economy as a “ticking time bomb,” saying: “When bad folks have problems, they do bad things.” China’s controversial new map, which depicts vast areas of India, Malaysia, Philippines, Vietnam, Taiwan and Bhutan (and even a bit of Russia) as Chinese territory, underscores the threat posed by Beijing’s increasingly aggressive behavior.
In addition to these external threats, India’s future would be shaped by its response to domestic economic challenges. Indian Prime Minister Narendra Modi has made great strides in modernizing the notoriously outdated Indian bureaucracy, and promoting e-government to reduce red tape and attract foreign direct investment. His government has invested heavily in upgrading and expanding the nation’s infrastructure, implemented regulatory reforms and sought to boost domestic manufacturing through Modi’s “Make in India” initiative. However, to transform itself into a global manufacturing hub, India must invest in human capital, particularly in education and training.
Moreover, India’s size and diversity pose enormous challenges. India might be the first developing economy that, from the start, has pursued modernization and prosperity through a democratic system. However, as one of the world’s most culturally diverse countries, its seemingly never-ending election cycle has often fueled division and polarization.
Still, despite its US-style polarized politics, India’s democratic framework has served as a pillar of stability. By fostering open expression and dialogue, the Indian political system has empowered grassroots communities and individuals, enabling members of historically marginalized classes and castes to rise to the highest levels of policymaking.
Whether India can maintain its upward trajectory would depend on its ability to maintain political stability, rapid economic growth, domestic and external security, and a forward-looking foreign policy. Success would enhance India’s global standing and help advance US interests in the Indo-Pacific region, the world’s new geopolitical fulcrum and home to its fastest-growing economies.
Brahma Chellaney is a professor of strategic studies at the New Delhi-based Center for Policy Research and fellow at the Robert Bosch Academy in Berlin.
Copyright: Project Syndicate
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