Late last month, we came to know that India experienced a 13.5% growth in the April-to-June quarter of this year, which made it the world’s fastest-growing large economy. India also replaced Great Britain as the world’s fifth-biggest economy. There was disappointment in some quarters as a few surveys had predicted an even higher growth rate. But the long-term trajectory of the Indian economy seems set, with India expected to emerge as the world’s fourth-largest economy, overtaking Germany, by 2027. Remarkably, three of the four top national economies by then are expected to be in the Indo-Pacific region: China, Japan and India. In a recent speech, Michael Patra, deputy governor of the Reserve Bank of India (RBI), underlined India’s emerging role as the “second most important driver of global growth after China”, with India’s growth financed primarily by domestic savings. Compared to 18% for China and 16% for the US, India’s share of global gross domestic product (GDP) already stands at 7%. This is happening at a time when the global economy has been facing negative headwinds as a result of rising food and energy prices, China’s zero-covid policy and Russia’s senseless war against Ukraine. The Indian economy has stayed resilient partly because of government intervention and partly because of its unique structure.

Serious reforms are needed to make India more investor friendly, particularly at a time when China has run out of favour.

Of course, this is not enough, and, as has been pointed out by many, India’s per capita income remains far behind nations that it is overtaking in terms of economic growth rate. A sustained policy effort would be needed to ensure that the present trajectory continues and is not merely a post-covid bounce. Serious reforms are needed to make India more investor friendly, particularly at a time when China has run out of favour. As investors seek new venues, Indian policymakers should be bold enough to take advantage of this unique moment in India’s political economy. But never before has India story looked more credible than it does today with the world in turmoil and India standing out as a beacon of hope. This economic trajectory of India also gives it a distinct place in global politics today. There is a reason why the West, despite its differences with India over Ukraine, has continued to substantively engage with New Delhi. In fact, India’s ties with the West have grown significantly amid all the negative press that India has received in the West. Where journalists remain prisoners of their short-term outlooks, policymakers in the West recognize the real story—the rise of India as a credible geopolitical and geo-economic player in the 21st century. Even as the India-West mutual courtship continues, India is maintaining its partnership with Russia, whose President Vladimir Putin wants to show the West that despite Western sanctions, he is not alone. He has the support of big powers like China and India. New Delhi wants to keep channels of communication open with Moscow, given their defence ties as well as regional security convergence. But also because New Delhi would like to make an effort till the last moment to ensure that the China-Russia axis does not become a fool-proof alliance. The future will be decided by how Russia fares in its war with Ukraine, and India will have little control over the outcome, but so long as a window is open, New Delhi will make this effort. China too finds itself in a bind and India’s stiff resistance to its aggressive pursuit along the Line of Actual Control has put paid to the Chinese Communist Party’s narrative that its time has arrived. India’s standing up to China has ignited a broad pushback across the Indo-Pacific and beyond. And with a plethora of domestic challenges being faced by Beijing, there is once again a premium on internal consolidation.

China too finds itself in a bind and India’s stiff resistance to its aggressive pursuit along the Line of Actual Control has put paid to the Chinese Communist Party’s narrative that its time has arrived.

India, as a consequence, finds itself in a ‘geopolitical sweet spot’ that it should make the most of. In the past, New Delhi’s inability to exploit the extant balance of power to its advantage cost it dearly. A prudent nation should be able to identify opportunities in the existing structure of global politics and shape its external engagement accordingly in pursuit of its interests. Pursuing unrealistic ideational constructs can do more damage to a nation’s standing. For India today, the most serious challenge is the rise of China and how it has managed to constrain India’s options. New Delhi’s first priority should be to internally consolidate its capabilities, so that it can stand up to Beijing’s nefarious designs on a more sustained basis. This should be supplemented with serious partnerships that are capable of adding value to India’s growth story. As a large part of the world sours on China, India must become an attractive partner. This requires making some choices that New Delhi has often been shy of. The basis of these choices should not be to make the world multipolar or enhance any chimerical strategic space. The only basis should be how these choices strengthen India’s long- term capabilities to emerge as a singular player on the global stage in its own right. This is an inflection point for the global order and for India. The country is on the cusp of achieving something dramatic: becoming not only a top-tier economic power that is also a multicultural democracy, but also a top geopolitical player that can lead and not simply balance. The choices that New Delhi makes over the next few years will define the contours of India’s rise.

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This commentary originally appeared in Live Mint.

• International Affairs
• China
• India
• Russia and Eurasia
• The Pacific, East and Southeast Asia
• China
• Economy
• GDP
• Indo-Pacific region
• Japan
• RBI

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