Also Published in The Financial Express @ https://www.financialexpress.com/defence/the-geoeconomics-of-indias-rise/2922059/
I had written earlier that as India has grown stronger in a changing geopolitical environment, it is emerging as a balancing ‘Third Pole’. I had concentrated largely on the geopolitics of being a ‘Third Pole’. As an extension, It is time to examine the Geoeconomics of India’s rise. At the core, geoeconomics is the interplay of international economics, geopolitics and strategy. In this context India’s rise must be seen against the backdrop of the unabating Ukraine war, high food and fuel prices, global inflationary struggles, search for renewable energy, oncoming climate change and China’s uncertain but assertive post-pandemic path.
As per Goldman Sachs, India will be the third largest economy by 2050. Arnab K Ray’s research paper Logistic Forecasting of GDP Competitiveness states that India is set to be the third largest GDP by 2047. The Deutche Bank paper Imagine 2030 says that the Indian economy is likely to touch $7tn by 2030. The Japan Center of Economic Research predicts that India’s GDP is set to overtake that of Japan around 2025 as can be seen in the Graphic below. . As per The Guardian, India is the potential new economic superpower who is rising quietly under the radar. Even France 24 acknowledges that India is a rising power finding its place on global stage. The sum total is that the India’s growing economy will anchor its rise as a power of global consequence
For all the positivity on the horizon, there are challenges India has to overcome if it seeks centrality on the world stage. None highlights it better than the article in Foreign Affairs titled Why India can’t replace China. It specifically highlights misgivings India’s economic framework, emphasis on self-reliance and policymaking ‘software bugs’. It also outlines that three major obstacles India faces is its quest to become ‘the next China’ are that investment risks are too big, policy inwardness is too strong, and macroeconomic imbalances are too large. All these make India look like a nation full of promises which are never fulfilled. If one reads Chinese analysis, the picture looks bleak.
That is where most analysts miss the woods for the trees. In most cases, India is mentioned in civilisational terms , assessed in a contemporary framework of expectation and always compared with China. When that is done, India looks very pedantic. Very few judge India on its terms. This includes many knowledgeable Indians including the prescriptive variety from abroad. However one needs to assess the situation professionally. A developing India does should not be the next China. That is the worst fate to befall any nation which is a progressive democracy. India must be a power on its terms and within its reality. It is actually rising accordingly. Many people have self-doubts about the authenticity of India’s rise. However one has to see this in a holistic framework without bias.
To put things in perspective, there are three economies, besides USA, which are larger than India at this point of time – Japan, Germany and China. Japan was completely shattered after the nuclear explosions at Hiroshima and Nagasaki. It was rebuilt by USA thereafter. Germany was divided at the end of WW2. It was rebuilt through the Marshal Plan. Later, it benefitted immensely by its re-unification process and the collapse of USSR. Both countries rebounded quickly since they were developed societies of that time. They have had an uninterrupted peace dividend since the Second World War. They were geopolitically aligned to USA. Hence their economic recovery and rise was almost inevitable. China has had a peace dividend from the time it went into war with Vietnam. It was invested into and assisted by the West. It was brought into the globalisation process which sped up its development. The common factor has been that China, Germany and Japan have had extended periods of peace and were aided and assisted by the West in their developmental process. India did not get the benefit of such international sentiment. In fact the opposite happened.
When India gained Independence, it was a partitioned nation which was economically and technologically deprived by the British colonial rule. Traditional knowledge and learning which had enabled it to be a thriving society was destroyed. The Britishers had left it with unsettled and contentious borders and perpetual adversaries in Pakistan and China. It has had numerous wars and proxy wars thrust on it. India has had to suffer numerous sanctions and was put under technology and aid denial regimes repeatedly. A poverty-stricken India was deemed to be an unnatural state. It was expected to dissipate and disintegrate into a nation of states and descend into a ‘poor’ form of ancient India. However, India has defied itself to survive and rise. It survived the internal churn of caste, creed, race, religion, ethnicities, ideologies, identities, language, politics and many more myriad diversities which constitute India. It survived the threats, vagaries and ravages of weather, elements and gods. It survived onslaughts from a predatory China and a toxic Pakistan. It survived the dismissive disdain of a disparaging West. Slowly and steadily it grew through famine, hunger, poverty alleviation, nonalignment, self- isolation, political upheavals and economic reform. Between the ebbs of a stagnant India and the flow of a progressive India, some edifices enabled India to rise despite odds. The first continues to be the common Indian – undaunted, steady, hardworking and hardy. Successful despite seemingly unsurmountable odds. The second edifice is our democratic system which functions with all its glitches. The third edifice is its apolitical, tough and unyielding Armed Forces which have held it together. The fourth edifice was given by the green revolution and operation flood which made India food secure. The fifth and sixth edifices are its nuclear and space programs. The former gave India a strategic shield and the later gave it the ability to reach out to Mars. An ability which very few nations have. The seventh edifice is the economic reforms, which began in the 90’s and are currently ongoing. The noticeable fact is that during this period, India has had a peace dividend, only in part, since the past two decades. Yet it has reached where it has.
India’s rise to be the fifth largest economy at present and become the third largest economy in future is a certainty when one looks as to how India has risen against all odds. In fact more important than the economy, India’s rise as a global power is on the horizon and no more a figment of imagination. Recently, Russian President Vladimir Putin lauded India as ‘a great power, a friendly nation and a time-tested friend’. As far back as 2015, the Obama administration viewed Indo-US relationship as ‘ one of the defining partnerships of the 21st century.’ This was recently reiterated by Kurt Campbell, the White House Asia coordinator. In fact he went on to say that India will be another great power. Most importantly, his statement that India will not be an ally but a strategic partner is acknowledgement of the rise. Even more importantly, the content and coverage on India coming out of Chinese media has increased. Whether positive or negative news, the fact is that China is more conscious of India’s rise than before. It is a backhanded endorsement. The rise of India as the third pole is inevitable.
Great powers are those which have the geoeconomic capacities to steer, influence and shape global events. Without them many global issues cannot be resolved. When seen in this holistic context, the words of Michael Ryan, Executive Director, WHO put India’s power in the correct frame. He had said in March 20, ‘India, which led the world in eradicating two silent killers, smallpox and polio, in the past, has a tremendous capacity in eradication of the coronavirus’. He prophetically spoke of ‘eradication’ and not ‘controlling’ it. It is doubtful if there has been a bigger challenge to humanity that the Coronavirus in the past century. India has had a large role in leading the world out of the pandemic unlike China which led it into the pandemic and is still stuck with it. In the future, India stands as the counterweight alongside USA to an increasingly aggressive China. India is at the intersection of multiple geopolitical issues, many of which cannot be solved without its positive contribution. It includes global food security and climate change, maintaining global peace and a rules based international order.
There will be detractors – internal and external who will doubt and be obstacles in India’s rise. However India has the depth of character to overcome the challenges as it has demonstrated so far. This does not decry the fact that India has many internal issues to surmount. However it had many more issues to contend with in the past. As India moves forward, it needs to have the strategic confidence that it is a power of global consequence which will grow. It must conduct itself accordingly as it moves into the centre of Global affairs as the Third Pole.
Refs :-
https://reader.foreignaffairs.com/2022/12/09/why-india-cant-replace-china/content.html
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