Why India Matters

By: Bruce Hull

India is becoming the most consequential country in history (again). Over a million people a month are joining its workforce. Almost as many are moving into its cities. The bulge in educated and motivated people provides a “demographic dividend” with tremendous hope and promise. The “dependency ratio” of workers to total population is huge, which means more workers, more saving, more investing, more consumption, and more growth—a self-reinforcing growth feedback loop (China’s dependency ratio is declining and hence they risk getting old before they get rich). Prime Minister Modi is liberalizing India’s economy, so capital, finance, property rights, and corruption are less of a constraint to growth. Global immigration trends are reversing brain-drain, making it more appealing for talented Indians to stay home and for successful expatriates to return (~15% of famed Silicon Valley startups are India-born). Providing the material needs for 1.2+ billion people has already stressed India’s environment and infrastructure to the breaking point. Yet, massive economic development and increased resource consumption remain moral imperatives because several hundred million people still live in poverty without access to water and energy and many more depend upon rain-fed agriculture for subsistence.

India must navigate profound cultural tensions that feel ready to snap and derail its enormous development potential. It has more malnourished people than any country (~200 million) but perhaps the 3rd most morbidly obese people (~30 million). It has 18 official languages, which presents obstacles to intra-country collaboration and travel. Yet, one of those languages is English, which gives educated Indians access to the default language of multinational business and the international opportunities that follow. India also has a history of religious pluralism that creates tolerance for Hindus, Muslims, Christians, Buddhists, atheists, nationalists, populists, scientists, and all types of others. Yet, religious TV broadcasts and other mass communication now widely disseminate a narrowing Hinduism that is more nationalistic, political, and exclusionary. India also is the world’s largest democracy with honest elections and a resilient bureaucracy. However, it is ranked internationally as more corrupt than 79 other nations (USA ranks 18, Denmark is least corrupt) and its famed chaos confounds western thinking and linear time, leading notables such as John Kenneth Galbraith to call India a “functional anarchy.” In many ways, India is more global than China, in others it is not: over 100 multinationals have located research and development labs here (twice as many as in China). Yet, foreign direct investment in India is not even half of what it is in China. And perhaps the most taught tension of all stems from the tolerance, what Sen calls patience, for extreme suffering and astonishing inequity: a discriminatory caste system, continuing child labor, female infanticide, open defecation, failing rural education, limited family planning, inaccessible health care, entrenched sexism, and squalid slums. In stark contrast to this patience, it is hard to ignore the rising buzz by nationalist commentators that claim the 21st Century belongs to India, lauding the accelerating accomplishments of the elite and the policies that support their success.

In addition to navigating brittle cultural tensions, India faces environmental challenges that might overwhelm everything. Pollution of water, air, and land threaten human health and social functions: millions die prematurely from diesel engine exhaust, indoor cooking over biofuels, and diarrhea. Aquifers are dropping meters each year. Heat waves kill hundreds. Monsoons are irregular. Cities are flooding. States are suing each other over water rights. Drought-driven crop failure and low productivity are causing an epidemic in farmer suicides. Urban growth is at breakneck speed yet 75% of the buildings expected to exist in India in 2030 have yet to be built. Traffic is horrific, yet less than 4% of Indians own cars, compared to 60% in the US, and domestic production now exceeds 1 million vehicles a year. Delhi occasionally owns the world record for worst air quality. As this list of challenges grows, the window of opportunity for sustainable development narrows.

For most of the last two millennia, the region we now call India was the world’s largest economy and had proportionally large cultural and political impacts (it occasionally was overtaken in magnitude by what is now China). In the 17th century, when the British engaged, India’s economy had declined a bit but was still 25% of the world’s. By the time the British left in 1950, India’s economy had shrunk to 3% of the global total. Now the region is rebounding. It is currently the 7th largest economy and should overtake Japan and perhaps even the US within a few decades. So the question that should concern all of humanity is: how will India develop well? The large, educated, wealthy, motivated, talented population fills India with tremendous hope and thrusts it into global leadership on all fronts. However, cultural tensions and environmental degradation could check and even reverse its advantages.

Many nations developed their material and cultural wellbeing by degrading their environments. Collectively those of us living in developed nations pushed the biosphere to its limits and in some cases beyond the safe operating space for human civilization. A similar development path for India would not only make India less resilient and more chaotic, it could impose a large cost on everyone. If smaller nations degrade their environment and pollute the commons, they hurt only themselves. But if India fails to develop sustainably, it will export its suffering to the rest of the world.

Key References:
Drèze, J., and A. Sen. 2013. An Uncertain Glory: India and Its Contradictions. Princeton.
Luce, E. 2010. In Spite of the Gods: The Rise of Modern India. Anchor.