According to United Nations data, India surpassed China in population in April of this year, becoming the world's most populous country. As an important economic powerhouse and a young nation with over 50% of its population under the age of 30, India's development potential is limitless. On August 15, 2022, Indian Prime Minister Narendra Modi pledged during the 75th anniversary of Independence Day to make India a developed country in next 25 years. This has drawn attention worldwide, and there are concerns about what kind of developed country India will become in the 25-year timeframe envisioned by Modi and how they will adapt their diplomatic strategies to address such changes.
Against the backdrop of current geopolitical tensions, the West is beginning to pay attention to India's prosperity and development, suggesting that China may be stepping back from its position as a prosperous and developed nation in the future. Regarding India's development in the next 25 years, researchers at ANBOUND believe that India will achieve a certain level of prosperity and become a wealthy country, but the sustainability and stability of this prosperity are debatable. At the same time, India may also become a new challenge for the world.
India's current economic growth rate is rather high. According to Nikkei Asia, India's real gross domestic product (GDP) grew by 6.7% in 2022, surpassing that of China. Its nominal GDP in 2022 reached approximately USD 3.38 trillion, exceeding that of the United Kingdom and approaching 80% of Japan's GDP. The International Monetary Fund (IMF) predicts that India will continue to grow at around 6% after 2023, and by 2027, there will be a reversal in GDP between Japan and India. This means that India has not only caught up to China but can also rival the Western developed countries of the previous generation in the future. In April of this year, the World Bank released its latest India Development Report, predicting a 6.3% economic growth rate for the fiscal year 2023/2024 (from April 2023 to March 2024). Overall, in the context of the global growth slowdown, India's economy has shown positive signs of recovery. Analyses indicate that this is due to strong investment activity and active consumer demand from India's high-income population.
Meanwhile, India is also undertaking significant infrastructure development. Emerging economies often prioritize infrastructure because it serves as a mechanism for job creation and a tool to attract domestic and foreign investments. It is precisely because of this that Modi views infrastructure development as the driving force of India's economy. He has a grand plan to vigorously promote infrastructure to propel India toward its goal of becoming a USD 5 trillion economy by 2024. According to data from The Economist, as of 2022, India's power generation capacity has increased by 22%, and its renewable energy capacity has nearly doubled in five years. The length of national highways constructed in the past eight years is twice that of the previous eight years. Additionally, the number of civil airports in the country has increased from 74 in 2014 to 148 in 2022. Domestic passenger traffic has risen from 60 million in 2013 to 141 million before the outbreak of the COVID-19 pandemic in 2019. On top of this, India also adds 10,000 kilometers of highways annually. The length of rural road networks has increased from 381,000 kilometers when Modi was elected in 2014 to 729,000 kilometers this year. These changes have contributed to the rapid development of India's economy. The Economist cites relevant studies indicating that the development of road networks stimulates economic activity, reduces transportation costs, increases trade benefits, and raises worker wages, particularly for skilled workers. India's rural road program has proven to be instrumental in shifting workers from agriculture to higher productivity jobs and improving the educational level of nearby villages.
However, India's infrastructure also faces numerous challenges. On June 2, India experienced a severe train collision, one of the deadliest of the century, in which three trains derailed and collided in the state of Odisha. The accident has already resulted in at least 288 deaths and over 1,000 injuries. After several days of repairs, the railway section has resumed normal two-way traffic, and the affected train services have also been restored. This incident highlights the issues with India's infrastructure, as the government directs funds towards new projects that can showcase achievements while neglecting the maintenance of existing facilities. According to a report from the Comptroller and Auditor General of India last year, while the government heavily focuses on constructing new lines and semi-high-speed trains, the allocation of funds for the maintenance of tracks and trains is decreasing. It is not only the railways but also instances of substandard newly constructed roads and collapsing bridges made of subpar materials. India is trapped in a cycle of "prioritizing new construction, neglecting maintenance". This poses a significant obstacle to maintaining long-term prosperity for the country. On infrastructure development, ANBOUND holds the view that while current infrastructure investment plays an evident role in economic growth, such extensive investments and construction will become a burden after several years. Reinforced concrete has a lifespan of over thirty years and requires maintenance and repair after aging. This maintenance necessitates enormous investment costs and becomes a heavy burden, materializing as debt. This development burden has already weighed down the economy in China and will also impact India's development in the future. Presently, India is the rising star of prosperous nations, but if it ignores the issue of infrastructure burdens, the sustainability of its prosperity cannot be ensured.
Other than the aforementioned infrastructure issues, India also faces variegated problems. For example, according to statistics from the World Bank released in 2017, 60% of India's massive population of 1.3 billion people live on less than USD 3.1 per day. If India's impoverished population does not undergo a transformative change in the coming decades, it cannot be considered a prosperous country. India can indeed become wealthy, but when wealth is not relatively evenly distributed, it is far from being prosperous. Modi's speech last year on the occasion of the 75th Independence Day was a political address aimed at garnering votes, which only spoke about the positive factors driving India's development while avoiding the existing challenges within the country.
Moreover, India also faces the challenge of nationalism. The stability of the Modi regime is due to its support for Hindu nationalism in India. The Washington Post points out that India has never downplayed the commemoration of Mahatma Gandhi as it does today. The article highlights the diminishing emphasis on Gandhi's principle of "nonviolence," and younger generations are discontent with what they perceive as Gandhi's compromises and concessions. They seek a different path, and nationalism has become highly inflated. This is also noticeable in the cultural domain. Bloomberg published a commentary stating that since Modi took office, India's nearly 200 million Muslim population has been gradually marginalized. They have become targets of politicians, the media, and mobs. This sentiment is extremely alarming and serves as an unstable factor that can detonate communal unrest at any moment. It is worth noting that this phenomenon is not only detrimental to India itself but also has implications for the world. As of now, the West appears to adopt an indifferent attitude towards India's nationalism, perhaps hoping that in the future, India can stand with it in balancing China's influence.
Yet, this is a misjudgment on the part of the West. Not long ago, the famous television anchor Arnab Goswami, known for his strong nationalist stance, engaged in a heated debate with an American professor on his show. The discussion quickly turned into the anchor and Indian scholars openly criticizing the U.S. Goswami and others accused Americans of having no right to tell Indians what to do. They argued that India is already the fastest-developing country in the world, while the development of the U.S. is declining. In another program where Goswami interviewed a former American diplomat, he bluntly stated that Americans are hypocritical, American democracy is chaotic, and the U.S. has no authority to interfere in India's internal affairs. Goswami's criticism of Americans was far from subtle, and it represents the attitude of many Indian nationalists toward the West's approach to international politics. If this is the stance India adopts before achieving prosperity, one can only speculate on the extent to which Indian nationalism will expand when the country's economy, as projected by Modi, undergoes rapid growth over the next 25 years and further enhances its economic standing. As a result, the present attitudes of Western businesses, the financial sector, and even some countries toward India and its market may be misguided. These attitudes are based on certain assumptions and a corresponding assessment of India's future. However, considering India's current stage of development and the proliferation of nationalism, its future will not align with the preconceived notions of Western businesses and capital sectors. Even after 25 years of prosperity, India will pose a new challenge rather than conforming to Western anticipation.
Final analysis conclusion:
India could potentially become a wealthy and developed country within 25 years. However, the challenges of per capita wealth, infrastructure quality, and maintenance may hinder its sustained prosperity. At the same time, the growing nationalism acts as both an obstacle to India's growth and a future challenge for the world.
