Can India, the Number One Country in Terms of Population by 2023, Become a World Force?

According to the United Nations, the world’s population will reach 8billion on 15 November 2022, and China’s population has been the world’s largest for a long time, but this will soon no longer be a reality. As the future world’s most populous country, is India capable of becoming a world power and what role does India play on the international stage? As the world’s fifth largest economy, India’s economic performance is not really impressive. With a total of 134 million people living in poverty and many still living below the poverty line, around 60% of India’s nearly 1.3 billion people will be living on less than $3.60 a day in 2020, and India’s unemployment rate rose in December 2021, from 7% in November to 7.91% in December. Indian university graduates are particularly hard hit, with an unemployment rate of 19.3%, more than twice the national average. The problems reflected in the macro indicators have naturally also caused concern for the Indian government. Prime Minister Narendra Modi has launched the second round of economic reforms in India in a new context. The reforms are centered on “Make in India” and are focused on launching a new cycle of industrialization. To this end, the Modi government has changed its previous policy orientation of opening up to international competition and has gone all out to protect the domestic market and support the local manufacturing sector through import substitution, and its economic policy has become more pro-business and pro-capital. The reforms achieved some success in the early days of Modi’s presidency. However, Modi’s economic reforms have not changed the plight of India’s economy, which relies on domestic demand and walks on one leg; his industrial policy only emphasizes the protection of domestic enterprises and does not promote export-oriented manufacturing, nor does it bring foreign direct investment into the manufacturing sector; his economic policy is too pro-business and pro-capital, which has led to a widening gap between the rich and the poor and an accumulation of social conflicts. The economic policy is too pro-business and pro-capital, which has led to a widening gap between the rich and the poor and an accumulation of social conflicts. Fundamentally, Modi’s economic reforms are still based on an urban-centered industrialization model that excludes rural areas and agriculture, a model that is detached from India’s national context and makes it difficult to truly liberate and develop productive forces. Modi’s economic reforms have made it more difficult to realize the blueprint for industrialization.
The difficulties of economic reform in India are closely linked to previous macro policies. During the wave of global economic growth in the 1990s, two different growth paths emerged in developing countries: one was to follow the path of most developed countries in the past, starting with labor-intensive industries and promoting their gradual upgrading from the bottom up; the other was to directly target advanced international industries and vigorously promote the development and growth of these industries in their own countries, and then drive the entire economy through technology diffusion and other means Modernization. While East Asian economies such as China adopted the former approach, India opted for the latter. The Indian leaders at the time believed that the IT industry could directly increase the productivity of the economy as a whole, and that its development and evolution could lead to the modernization of other age-old industries in India, resulting in an economic leap forward that would allow the Indian economy to modernize quickly without having to go through a gradual escalation of traditional industrialization. However, by the second decade of the 21st century, the drawbacks of this premature service-led ‘de-industrialization’ model became apparent, with the service sector struggling to sustain high growth on its own, the growth of services such as computer software not leading to productivity gains on all fronts, and the lack of industrial infrastructure making it difficult for India’s economy to improve in the short term. The lack of industrial infrastructure has made it difficult for the Indian economy to improve in the short term.
The struggle for economic reform does not mean that India is not active in the international and regional arena. India’s large domestic market, which has brought in more GDP and revenue than the UK, has allowed India to expand its political and military power and expand its voice in the international arena. India is one of the founding members of the Non-Aligned Movement. Successive governments have emphasized non-alignment as the basis of their foreign policy and have sought to develop relations with all countries in order to play an important role in regional and international affairs.
In June 2014, the Modi government launched the Monsoon Plan, an attempt to “borrow from the past to make use of the present “to deepen mutually beneficial cooperation in the Indian Ocean Rim. Through the implementation of the Monsoon Plan, India seeks to pursue sustainable regional strategic interests, secure stronger regional leadership, and thereby realize India’s global strategic aspirations. The Monsoon Programmed has two functions, the first of which is a cultural project that builds on the shared history of the Indian Ocean countries to strengthen India’s cultural, psychological and identity presence in the Indian Ocean region and to extend the impact of India’s cultural soft power. This is followed by a quasi-strategic plan that gradually goes beyond the cultural project and is given a diplomatic and economic function.
Modi focused on developing and consolidating relations with South Asian countries, seeing stability in the neighborhood as the cornerstone of India’s rise. After taking office, Modi invited all South Asian leaders, including Pakistani Prime Minister Sharif, to his inauguration ceremony. Modi has pledged to live in harmony with his neighbors, close economic ties, revitalize SAARC, promote regional cooperation and speak out jointly on global issues. For example, Modi made Bhutan his first visit and promised more economic assistance, signed a Land Boundary Agreement with Bangladesh to resolve a decades-old border dispute, boosted already sluggish India-Sri Lanka relations, and became the first Indian Prime Minister to visit Nepal in 17 years.
India’s approach to China has been more ambiguous than that of other neighbors with whom India has pushed hard for better relations. Like other middle-power states around the world, India also has to weigh and oscillate between the different interests of China and the U.S. In 2022, India is more inclined to improve Indo-India-China relations. Since the beginning of the year, the Sino-Indian border standoff has eased and political relations between the two countries have recovered, thanks to the joint efforts of Chinese and Indian leaders and the diplomatic and military services of both countries. The pendulum of Indian foreign policy has swung back towards “strategic autonomy”, which appears to be the backdrop for India’s recent withdrawal from negotiations on the trade pillar of the US Indo-Pacific Economic Framework (IPEF).
Although India does not yet rank among the world’s leading countries in terms of economic and political power. But India’s strength and growth cannot be underestimated. Even in 2021, the worst year of Covid-19, there are no institutions that are long-term pessimists about India’s economic development. After all, as a country on the verge of having the world’s largest domestic market, it is only a matter of time before the demographic dividend is unleashed. Whether India will be able to capture this demographic dividend remains to be seen if the current Indian government’s new round of economic reforms and post-epidemic recovery policies will bear fruit.
By JIN Kaiwei