[MUSIC] In this video, we're going to examine a rising middle power, India, and talk about how it became a kind of much talked about success story from the point of view of its economic rise. India was not taken seriously for a long, long time after its independence in 1947, because of what economist Raj Krishna termed as the Hindu Rate of Growth. This was supposed to be based on fate, destiny, and a very, very snailish pace of economic growth. 1.5 to 2 or 3% GDP growth per year all the way from 1947 until the 1990s. Now, this was a result of flawed socialistic economic policies, excessive state control over the entrepreneurial ability of India's people, and bad governance in many sectors. So, the net result of all of that was this so-called Hindu Rate of Growth, which was disappointing, and which did not really live up to people's expectations, both of the people of India and of the world, that this country with the vast population, the second largest in the world will actually be a leader. So that was not happening for many decades and people had actually written off India. But then once the Soviet Union collapsed and the whole socialist planning model lost its appeal, India moved in a different direction after 1991 and started picking up and liberalizing its economy. And suddenly it became a very attractive proposition for foreign investors. And there was the talk about India joining the Asian Tigers. Japan, South Korea, Taiwan, and ultimately China, all of these countries had modernized and industrialized and had grown faster much before India did. So, the idea was that India was also finally moving in the same trajectory and it became the talk of the global investor community and economists started projecting India's rise as an economic power. Now, if we recall in hard power, economic power is a very, very important or central driving ingredient. So, without economic power, no middle power can aspire to become a great power. So, it was very essential for India to prove its mettle in terms of its economic growth. So, we started seeing that in the 90s and there was a big spurt of high growth of 8 to 9% GDP per year from 2003 until the global economic crisis of 2008. Then there was again a slowdown because the global shift and also governance issues at home, and then another round of high growth that started after 2014. Now economic consultancies are projecting that India's GDP growth will continue to be high well until 2030 or beyond and that it should become the world's third largest economy by the time. It's around fifth and sixth in size, in total GDP size, depending on different yardsticks of measurement. So, third largest economy after China, the United States, and probably ahead of even Japan, it will take some climbing, but that's the prediction. And then if you think about India's size, its population and then it seems like a natural place to be at least third in the world. And that of course feeds into the expectations about India becoming a great power one day, it's still a middle power, and there's still a long way to go. But the economic bounce and the dynamism with the privatization and the freeing of the entrepreneurial energies of the India's people definitely counts, and this has become one of the main reasons why India is a talking point in global fora. And many, many countries around the world look at India as an opportunity to invest or to sell to or to buy from. So, you can see how the networks of trade and investment which drove China's growth to become a great power, how the same networks could potentially turbocharge India's rise to become a great power one day. So economic power is absolutely essential as we know, to rise up the ladder. And economic power matters in terms of the surplus that the state has at its disposal, that the citizens have at their disposal in terms of their ability to invest in the military and to also support foreign countries through aid and development assistance. So having a healthy and growing and robust economy is always important to be able to project power in the world. Both the United States and China, the two great powers of contemporary times, have enormous economic resources at their disposal. And that's what they've been able to make it. So Indian policymakers obviously realized that the number one ticket to great power status or to further rise as a middle power and to move out of the category of just a subregional or a small power, for that ascent to happen, economic growth is the key. So, a series of policy measures have been initiated and also attempts to attract more and more foreign direct investment into India for manufacturing and in services and other sectors. So, there is this whole India miracle if you like, which has been late, compared to the other Asian Tigers. But it's got some purchase now. People around the world, if you talk to global CEOs and big corporate honchos, capital markets, they all talk about India as the as a source of hope and as the next big center for fast accelerated growth. So, joining the capitalist world order after the collapse of communism and then adopting a series of policies that will enable high growth that will lift people out of poverty and make the middle-class size bigger and make India more assertive and powerful on the world stage. This is the story of India's rise as a middle power. It was not taken seriously before as I said, but no longer so. And the transformation began with this economic rise. There are a lot of Indian companies not only operating within the country now, but also overseas, trying to acquire assets overseas. And of course, India is hosting many major multinational corporations. So as far as the vision goes, India's leadership seems to have gotten it right. Of course, there are a lot of reforms required, domestic labor market reforms, land reforms, factor market reforms as they're called in economics. Those things are deep structural issues. There are still lots of problems with investment in India and many still doubt whether it can make it to the top rungs to be an equal of China or Japan or of the US. But the projections are there and we need to take them seriously. And when we think about the emerging world order, emerging multipolar world order, it's necessary that we stick to the projections. We understand that there is this possibility for India to emerge. And the other things, the military and the soft power and all those we’ll come to those. But the core engine driving India's rise is definitely economic. So, to sum up, the Indian story is largely one of disappointment for nearly the first half century since independence as a post-colonial state, but then of high expectations and high ambitions in the last couple of decades and going forward. [MUSIC]
