China Research

A discussion forum on emerging markets, mainly China – from a macro, micro, institutional and corporate angle.

India – Modi wants to win the election and act as the voice of the South

March 26, 2024

One month from now – on April 19 – general elections will start in India and include altogether seven stages until June 1. Almost one billion people are invited to vote – 150 million people more than last time.

Opinion polls point at a new victory for current Prime Minister Narendra Mori and his Hindi right wing Bharatiya Janata Party (BJP) together with BJPs coalition partners (see my article from February 22 this year with the title “India isn’t easy to analyze and to deal with”, including comments on the economic development and challenges, Most observers expect the oppositional alliance called INDIA to weaken the position of the BJP – but not strongly enough to win.

Strengthening India’s voice of the South

There is no doubt that Modi during his assumed third mandate period aims at further strengthening India’s role as voice of the South, certainly in competition with China. Both countries appear to be quite different in their political approach vis-à-vis the southern world.

India seems to see the South in a collective view with visions of necessary common achievements in important areas such as less poverty, better health and environment but also non-violence in Gandhi’s historical spirit.

More exactly, the Indian government made the following comment in this context: ”India hosted a special virtual Summit, called the Voice of Global South Summit under the theme – ‘Unity of voice, Unity of purpose’ from January 12-13, 2023. It was a new and unique initiative that envisaged bringing together countries of the Global South and share their perspectives and priorities on a common platform across a whole range of issues…”.

India obviously strives to integrate the global South more visibly with the Western hemisphere – in line with its philosophy to see the whole world as one family (Vasudhaiva Kutumbakam).

China’s strategies on the other hand tend to base quite openly on commercial objectives, for example by producing and financing new infrastructure projects and by receiving in return access to important commodities or Taiwan issues. However, China also uses, for example, BRICS and the trade agreement RCEP as platforms for meeting the South multilaterally.

It may be interesting to see how India and China will compete in the South in the longer run. It seems to be on the cards that this competition will become fiercer.

Hubert Fromlet Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

India isn’t easy to analyze and deal with

February 22, 2024

More or less simultaneously, India has more recently shown up as a new economic superstar in the global financial (corporate) world whereas China rather moved in the opposite direction. Western doubts about China have been increasing. However, this does not mean that India now appears as an easy-handled substitute for economic activities in China. India and China are very different countries in lots of aspects – analytically, commercially and culturally. For this reason, India and China should be treated as different countries also in most commercial respects.

Understanding India takes time

About 20 years ago, I wrote frequently that it would take time learning to understand China. But only in the past few years, most Western corporate leaders and analysts started to watch China with necessary analytical and questioning eyes – many years after the corporate herd run to China had started.

Today, there is again an obvious risk for premature conclusions on another giant country – the “continent” of India. But I am not arguing against Swedish or other foreign activities in India. Having followed the Indian development relatively closely in the past two decades, I feel pretty sure about the conclusion that India has developed into an interesting country for many Western companies. My point is another one.

Instead, my major general concern refers again to psychology which I did in a similar way some twenty years ago when I discussed the issue of corporate herd behavior to China, p 148.

Usually, economic herd behavior can be recognized particularly on financial markets – but it can be spread from there to other business sectors as well. Naïve decisions should be avoided.

Indian shortcomings    

Despite the fact that transparency in reality looks better in India than in China, one should not forget that Indian economic statistics have their shortcomings, too – partly caused by the enormous size of the country. Using the rankings of World Economics shows that India and China are located quite close to each other – both provided with the remark that economic statistics should be handled “with caution” (

The (partly) lagging quality of Indian economic statistics is one of many institutional shortcomings in the fifth largest economy in the world (lately having left the UK behind). By 2027, India hopes to be ranked as the number three economy on this globe.

Usually, corruption and bureaucracy are most frequently taken up as institutional obstacles in India but many other negative examples could be mentioned as well. On the other hand, institutional progress can be noted all the same (see the following official “marketing” remarks,

Altogether, Indian improvements in the past few decades should, of course,  not be neglected. However, India still must be regarded as a slowly moving country – also when it comes to legislation.

Some of India’s most growth-hindering restrictions have now become more well-known in the Western corporate community. But at the same time, I have the feeling that the macroeconomic analysis of India to a high extent remains undervalued. India has also certain macroeconomic challenges.

Sure, India has managed quite reasonable GDP-growth rates in recent years, at the same time showing good resilience in a worrisome global economic world (which partly can be related to the less globalized economy compared to, for example, the Chinese conditions, and partly to certain structural improvements).

Domestic demand is the real strong driver of Indian economic growth and will remain so, also when considering the enormous improvement needs of the climate, energy, infrastructure, education and living conditions. In the longer run, however, India should also achieve solid fundamentals for export-driven growth.

It seems obvious that macroeconomic shortcomings should be considered as well. Inflation, for example, could be lower. The same can be said about unemployment – unfortunately affecting young unemployed academics as well. The balance on current account on the other hand seems currently in an improving shape.

But in the first place of concerns we find public debt for both the central government and the federal states. Unfortunately, statistics are not always handled very carefully. Financial analysts often only quote central government debt and forget about federal state debt. Altogether, Indian public debt can amount to something like 85 percent of GDP (two thirds for central government debt and about one third for the federal states). In December 2023, the IMF sent a warning to India about possible negative public debt prospects ( Something to relate to future economic growth.

High Indian expectations – can they be met?

It seems to be clear that India has become much more ambitious in recent years and wants indeed to become a global economic powerhouse – combined with stronger political influence on this globe. Being generally considered as the largest democracy in the world will continue to help a lot in the eyes of Western governments and corporate decision makers. I use to define this special Indian position by using the words “that India has more sympathy points in the West” (compared to the autocratic and still opaque country of China). 

So far, India has managed its sensitive relations to Russia quite well, i.e. without particularly irritating the Western hemisphere. But there exists also criticism against Prime Minister Modi’s consequent Hindi right-wing nationalist agenda. However, Narendra Modi and his Bharatiya Janata Party (BJP) – together with their coalition partners of the “National Democratic Alliance” – seem to have good chances to remain in power after the “Lok Sabha”-elections in (probably) April and May this year. Indian polls do not rule out some losses for the current coalition – but most probably without leading to a shift of government. Ongoing good growth prospects and India’s increasing role in international politics should contribute to another term for Modi and his coalition partners.

Strong winds of confidence are certainly blowing through India these days. Thus, India has officially declared to aim at a 7 percent GDP growth in both 2024 and 2025. Furthermore, the government has even set a considerably higher growth objective for the long run – by transforming India into a developed country by 2047!

An overoptimistic objective? Impossible to say such a long time in advance. However, I feel quite sure that the long road to a developed country must be paved by persistent and major institutional improvements and reforms. This is exactly what the Western corporate sector would like to see in the future.

Conclusion: Despite current good growth rates, India should not be regarded as an easy country to analyze and to deal with (see also my article on this topic from April 28, 2023,

Keep in mind now and in the future:  the understanding of India takes time!

Hubert Fromlet Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

The Future Global Development: Hope and Concerns

December 6, 2023

Valedictory Address at the IIF International Research Conference & Award Summit (IIF-IRCAS), Delhi / India, December 2, 2023 by Prof. Hubert Fromlet, Linnaeus University/Sweden


After many years of fruitful relations with the Indian Institute of Finance (IIF), it is real honor and pleasure for me to have another speech for teachers and students at the very successful academic institution of the IIF. I am speaking also in honor of the late professor J.D. Agarwal, the founder of the IIF.

In many respects, the world has entered a period of disorder. We are confronted with wars, radicalism, political turmoil, protectionism, poverty, suffering refugees, egoism, political extremism and populism, lagging and economically weak and unstable countries – and all this simultaneously. But I also feel happy about India’s progress in the past few decades – and wish  this important catching-up country all the best for the future.

Below, I will sum up six factors of hope and ten factors of concerns (without ranking) that currently occupy my reflections a lot. Obviously, it is easier these days to put together the factors of concerns – but hope and (future) opportunities should not be neglected either. This latter conclusion is important for both financial markets and the corporate sector. We hereby touch briefly on behavioral finance and behavioral economics. Positive or encouraging psychological contributions may play an important role in bad times to develop turning points in the right direction; of course based on fairly realistic expectations.

Factors of concern

¤ The war in the Ukraine.
The Russian war in the Ukraine still goes on as a psychological (human) and financial burden, mainly for the U.S. and Europe.

¤ China’s economic and financial development.
China’s economy and the financial development remains a conundrum that creates uncertainty and concerns because of lagging transparency.

¤ China’s political development.
President Xi Jinping’s autocratic leadership style does not provide China with good predictability – neither when it comes to the economy nor to politics (e.g. vis à vis the U.S., Taiwan)

¤ The U.S. after the next presidential election.
The unpredictable Donald Trump as a possible new president scares me a lot.

¤ The political development of the EU.
The EU will have elections in its member countries in 2024 – with good chances for the extreme right as a big concern for EU unity.

¤ The economic development and reforms in the EU.
Further nationalism in the EU would impede reforms and growth.

¤ Insufficient reforms in emerging markets.
Most emerging countries still need a lot of reforms. An open question may be to what extent China’s growing political influence in many emerging countries impact on market reforms.

¤ Energy and water shortage in rich and less favored countries.
Global water shortage worries me a lot – but also uncertain and uneven global energy supply.

¤ Further increasing protectionism.
Here we have a risk of further reduced global trade expansion and economic growth. 

¤ Last but not least: turmoil on global financial markets.
Negative surprises on global financial markets may “always” be on the cards. As an obvious potential risk, I may particularly mention all the (hidden) financial imbalances in China but also potentially bursting financial bubbles elsewhere.

Factors of hope

¤ Politics – bad political leaders may be replaced sooner or later.
At least in working democracies, one may hope that bad political leaders some day will be replaced by more competent successors.

¤ Increasing global insight of climate improvement needs.
This is a factor where improvement is visible (but still too little).

¤ Global insight that education is a growth-driving need.
There is a growing insight around the world that the creation of new human capital is a main factor for stronger potential growth.

¤ Emerging markets receive growing political attention.
Here, we can currently watch an important development that does not look perfect but will gradually improve self-confidence of many emerging countries, particularly in the so-called South.

¤ Gender equality is improving globally (but still too slowly).
Progress happens in many countries. More still can be done. Nice to see that we in 2023 got another female Nobel Prize Winner with Claudia Goldin.

¤ AI means a lot of hope – but also unpredictable risks.
AI is currently expanding very quickly – creating a lot of new opportunities, particularly in medical research and diagnosis. However, AI risks should not be neglected one single day.

Altogether, 2024 will be an extremely important political year with lots of economic implications and consequences.


Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board


Back to Start Page