{"id":3671,"date":"2025-05-07T12:28:34","date_gmt":"2025-05-07T11:28:34","guid":{"rendered":"https:\/\/blogg.lnu.se\/china-research\/?p=3671"},"modified":"2025-05-07T15:03:03","modified_gmt":"2025-05-07T14:03:03","slug":"india-the-next-global-superpower","status":"publish","type":"post","link":"https:\/\/blogg.lnu.se\/china-research\/?p=3671","title":{"rendered":"India \u2013 the next global superpower"},"content":{"rendered":"\n
Recently, in 2023, India has become the most populous country in the world \u2013 often commented with the additional remark that China on the other hand still has a much larger economy. This is certainly true. However, India\u2019s economic growth rate is now exceeding China\u2019s, causing quite some increase of foreign interest in this giant country. But there are also other reasons for the conclusion that India is on its way to become a political and economic superpower. I therefore finally decided to formulate the headline of this article without a question mark.<\/p>\n\n\n\n
India seeks more international influence and recognition<\/strong><\/p>\n\n\n\n
India is a country with many (changing) faces. I remember my first trips to India in the early 1990s when foreign influence on merchandise and service markets was almost absent. I could observe this with my own eyes. Today, India looks quite different, modern at many places but not everywhere. India\u2019s GDP per capita is still very low and indeed visibly weak when getting around – but the middle class is at the same time expanding quickly and the number of dollar millionaires as well.<\/p>\n\n\n\n
In other words: India needs good economic growth to move on further. And we know that economic growth is a function of productivity gains, hours worked and capital accumulation. Improvements in these areas are necessary and will happen in India. But how fast in a country that historically has been moving slowly?<\/p>\n\n\n\n
The answer to this question depends to a high extent on India\u2019s opening-up policy and attractiveness to foreign investors. In this respect, it seems plausible to be fairly optimistic, both due to China\u2019s structural slowdown of economic growth and to president Trump\u2019s confusing economic policy which obviously favors India with its balanced foreign policy and good growth potential. So chances of quite rapidly growing FDI in India on trend are quite good \u2013 despite disappointing numbers in the past few quarters.<\/p>\n\n\n\n
Both Western politicians and business people rush currently to India more than ever to find out more about the opportunities that India may offer in the foreseeable future. Both the U.S. and the EU are looking for (attractive) trade agreements with India. Other countries such as the UK are trying to do so as well. India is diplomatically and politically already treated as a global superpower. And what about the economy in such a superpower context?<\/p>\n\n\n\n
Prime Minister Narendra Modi\u2019s comment on the issue above last fall summarized nicely India\u2019s optimism about his country\u2019s future: \u201dIndia is becoming a prime center of diversification and de-risking as a hub of global trade and manufacturing. Given this scenario, now is the opportune time for \u2026 companies to make in India, and make for the world<\/strong><\/em>\u201d (October 2024 at the 18th Asia-Pacific Conference of German Businesses).<\/p>\n\n\n\n
India receives more Western \u201csympathy points\u201d than China<\/strong><\/p>\n\n\n\n
Economic growth of China has been slowing down quite dramatically in the past two decades, from double-digit increases to less than half whereas the GDP development of India was the other way around. In 2007, China\u2019s GDP-growth rate was almost twice as high as India\u2019s, 14.2 compared to 7.7 percent. The corresponding growth numbers in 2024 were 5.4 percent for China and about 6.4 percent for India (without discussing here the correctness of Chinese GDP statistics). On the other hand, China\u2019s GDP per capita is still much higher than India\u2019s.<\/p>\n\n\n\n