Rising India And Its Detractors
Remarkable success in advanced education and progress on reforms have accelerated India’s growth, raised its geopolitical stature, and met with some shockingly offensive media criticism.
Photo by Naveed Ahmed on Unsplash
Why does India’s success rub so many commentators the wrong way?
The state visit of India’s Prime Minister Narendra Modi to Washington D.C. highlights two issues that deserve attention. First, the drivers of India’s rising global economic and political significance. Second, the prejudicial animosity that some western media harbor for India’s current government — and for India itself.
India’s rising importance, underscored by Washington’s red carpet treatment, reflects three key factors: (1) its growing economic power; (2) its crucial geopolitical role; and (3) the outsized success of its diaspora. The coverage in the western press has recognized these three factors; but the praise has often been accompanied by underhanded criticism that in some cases reached shockingly offensive tones; The Economist is the most egregious example, as I discuss below. First though, let’s take a look at why India has to be taken seriously.
Big, and finally fast
India is already the world’s fifth largest economy measured in current US dollar terms, after the US, China, Japan and Germany. If we measure it in purchasing power parity to adjust for the fact that prices in India and other emerging markets are lower (hence one dollar in India buys more than in the US), India would be already the third largest. And it will become the third largest even in current US dollars within five years, according to IMF projections.
Source: IMF
Standards of living are another matter; as I noted in a previous blog, India’s per capita income is still very low and will take a long time to get close to advanced economies levels. But the overall size of the economy does give you global economic and political heft, and India now has it.
India’s already large economy has started growing at a fast clip. From an average of 5.5% per year during 1980-2002, India’s GDP growth stepped up to 6.8% during 2003-2022. Let’s strip out the impact of its robust population growth: over the same two periods, per capita real growth jumped from 3.3% to 5.4% per year. India’s economy is picking up speed and driving faster growth in incomes. Moreover, a 6% projected annual growth rate applied to what’s already the fifth largest economy means a substantial increase in absolute market size.
Source: IMF
Digital miracles
A steady improvement in economic policies over the last several years suggests the faster pace of growth is likely to be sustained. The Modi administration has launched important investments in infrastructure, including transportation and energy. Since 2014 (when Modi took power) the road network has been extended by 25%. The number of airports has been doubled, and India is now adding solar energy generation capacity at a fast pace.
But it is on the digital front that India’s progress has been most impressive. The country has launched a Digital Public Infrastructure (DPI, also known as “India Stack”), which began with the deployment in 2009 of Aadhaar, a biometric digital identity system that now covers nearly the entire population and enables a much more efficient distribution of public services while enabling access to the economic system for tens of millions and helping to curb corruption. This has been followed by the Unified Payments Interface (UPI), which greatly simplifies cashless transactions — the IMF estimates that UPI already accounts for about 70% of all payments. A data exchange infrastructure underlies both systems and allows the DPI to extend to other key areas such as health and education. A recent IMF report details the benefits of this digital revolution, which include increasing access to finance and to public services, reducing costs and extending the reach of the formal economy.
Providing these services at a staggering scale to a population of 1.4 billion constitutes a massive achievement, a testament to India’s well-established prowess in Information Technology. It also underpins the strong growth in India’s services exports. Together, they are the result of a culture that prizes education, and of an education system that at its top tier has demonstrated global-level excellence for decades, especially in science and technology (though a lot of work needs to be done to improve education throughout the country, beyond its famed Indian Institutes of Technology and Indian Institutes of Management.)
India’s diaspora: A most successful export
The same culture of education has shaped the success of the India diaspora. The Economist has some striking statistics on this:
India is the world’s largest source of migrants;
Last year, three-quarters of America’s H1-B visas for highly skilled workers were awarded to Indians;
In the US, 80% of Indian-born residents above school age have a university degree, compared to 30% for the overall population;
Indians are the highest-earning migrant community in the US;
25 companies in the S&P500 are led by CEOs of Indian descent, including most famously Adobe, Alphabet (Google), Microsoft, and IBM. Not to mention companies like Novartis and Starbucks and a vast number of startups. Oh, also the deans of three of the US’s top business schools.
This outsized high-quality emigration creates a powerful link between India and the English-speaking west, contributing to innovation and economic growth on both sides. The large, hard-working diaspora, which includes millions of lower-skill migrants in the Middle East and hundreds of thousands of migrants in Britain, Canada and Australia, also brings substantial direct financial benefits for India: remittances reached about 3% of GDP last year.
More to be done, but momentum is building
India still has an enormous amount of work ahead to lift its population’s living standards — per capita income in purchasing power adjusted terms is just one-tenth of the US level. It will take many more years of continued investment in infrastructure; further efforts to liberalize the economy will be crucial — India has made good progress in dismantling its infamous “License Raj”, but there is a lot more red tape to cut; and progress in broadening and diversifying its industry beyond the few giants that play a dominant role.
It will take time, and progress will most likely be uneven. But India has upped its game, and thanks also to the digital accelerants, the tangible benefits of economic reforms should build popular support for continued movement in the right direction. And as I mentioned above, India’s economy has already reached the point where it plays a very important role in the global economy and global trade, which in turn creates its own virtuous self-sustaining dynamics.
Greater confidence on the global stage
India now projects a more confident attitude on the global stage. As current president of the G20, it has put forward its DPI success as a model for the rest of the emerging world, offering its digital platforms and technologies for free and opening the way for Indian institutions and companies to contribute to digital progress in other emerging markets.
On the global geopolitical scene, India stands out as a natural counterweight to China, with which it has had its fair share of tensions. The geopolitical equation is complicated: India did not join the West’s condemnation of Russia, and its continued purchases of Russian oil undermine the effectiveness of western economic sanctions. India’s attitude here is shaped by complex historical factors as well as by more straightforward economic ones; it makes its relationship with the US and Europe more nuanced, but it also highlights India’s increased economic and political weight.
We hate it when our friends become successful
Which brings us back to Modi’s visit to the US. Here comes the head of the world’s largest democracy, a country that produces an outsized share of industry and innovation leaders as well as the most educated and successful large migrant community, a country that has accelerated economic growth through economic reforms and made impressive progress with a digital revolution that helps lift living standards for a billion and a half people and might help billions more across the emerging world.
In its leading editorial, The Economist salutes it with the following:
“Though India seems sure to remain a democracy—not least because Mr Modi is almost guaranteed re-election next year—it is an illiberal one. The fact that only 60m of its 1.4bn people have formal jobs is a potentially explosive situation in a country prone to rabble-rousing.”
Notice the poisonous insinuations: India “seems” sure to remain a democracy because Modi will probably win re-election, says the paper; thereby suggesting that should Modi lose, he might somehow engineer a coup and democracy might suddenly end. Moreover, it paints India as a powder-keg, where a combination of poverty and populism could at any moment result in revolution.
I find this characterization simply shameful.
We are talking about a country that has been a stable vibrant democracy since its birth in 1947, holding regular and orderly democratic elections with a population that is now 4-5 times that of the US. Modi’s BJP won a resounding majority in 2014 and an equally decisive re-election in 2019. Its enduring popularity stems in large part from its success in improving living standards, including with a focus on unglamorous but essential priorities such as sanitation. Nothing in the government’s behavior has ever suggested it might not accept an election defeat. Nor has the long-standing high share of informal employment ever generated revolutionary rumblings.
The Economist also ominously notes that:
“few big democracies have slid further in the rankings of democratic freedom.”
Let’s see… The Economist Intelligence Unit publishes a Democracy Index report. The latest edition (2022) lists India as a “flawed democracy,” together with, wait for it, wait for it…the United States, Italy and Belgium. India has held stable in the ranking since the previous year (with an improvement in its index), whereas Italy has slid by three places and the US by four (and no, you can’t blame Trump…). It seems rich to suggest that India might be sliding towards authoritarianism.
The Financial Times sounds positively nauseated by Washington’s warm welcome to Modi, and in a remarkably embittered article also talks of
“…the recent backsliding of India’s liberal democracy,” and “…what is left of its independent media” as “Modi is trampling on too many rights to mention.”
Modi’s BJP has been criticized for emphasizing the importance of the Hindu religion, and for pressure on the media. Lamentable, but those who live in glass houses…. The US, the UK and countless other western democracies have over the last few years implemented heavy censorship campaigns with heavy pressure on social media and traditional media companies to curb what they conveniently defined as “disinformation”. The UK’s Orwellian Government Counter-Disinformation Unit stands out as a chilling example. We have also seen the banning of speakers and increasingly pervasive limits to free speech across US and UK universities. And the veil of silence that US media protectively lays over President Biden’s endless senior moments is not exactly the mark of a free press. India’s government has indeed adopted a heavy-handed approach at times — tax inspectors raided the local BBC offices after it aired a documentary critical of Modi — but local media criticism of the administration is loud and clear, as this NPR report shows; India looks a lot more like the US and UK than China or Russia.
Any weakening of democratic institutions anywhere should be flagged and criticized; but singling out India as a flawed democracy on the brink of authoritarianism is egregiously unwarranted.
Most of the western media seem to have developed a knee-jerk reaction to any government or political leader not aligned to the left; they are immediately characterized as “extreme”, “nationalist”, “populist” and “X-phobe” (Islamophobe for Modi). In the case of India, UK publications like The Economist go a step further and seem unable to report any achievement without adding a patronizing put-down. Perhaps the colonial heritage makes India’s success too bitter a pill to swallow for some UK commentators.
The rising resentment of its detractors might be the clearest sign that India is truly rising.
Very well written Marco. Perhaps, one of the most important factors that have contributed to the success of Modi and his BJP has been the mass reach he has successfully achieve. Earlier governments were by and large filled with elitist, English speaking 'intelligentsia' who could only win elections by bribery and by appealing to 'vote banks' such as caste driven or religion driven groups. Modi has made almost a personal connection with each and every citizen through a variety of means including his famous 'Mann ki Baat' talks which literally translates to 'speaking my mind'. These are almost the same as Roosevelt's 'Fireside Chats' in which he regularly talks about issues concerning the nation and its citizens. I believe it is this personal reach which makes him so popular in India, especially amongst the vast majority of poor, vulnerable people. Since they account for over 70% of the population, they're the ones who vote him to power!
From Amnesty International latest India report: "Laws and policies that were passed without adequate public and legislative consultation eroded the rights of human rights defenders and religious minorities. The government selectively and viciously cracked down on religious minorities, and explicit advocacy of hatred by political leaders and public officials towards them was commonplace and went unpunished. Punitive demolitions of Muslim family homes and businesses were carried out with impunity. Peaceful protesters defending minority rights were presented and treated as a threat to public order. Repressive laws including counterterrorism legislation were used rampantly to silence dissent. Authorities intimidated human rights defenders using digital technologies, including unlawful surveillance. Adivasis and marginalized communities including Dalits continued to face violence and entrenched discrimination." https://www.amnesty.org/en/location/asia-and-the-pacific/south-asia/india/