India is the 2nd soon to be 1st most populated nation in the world but its GDP sits at 5th or 6th depending on the source roughly on par with the UK and France. The top 2 GDP nations are the US with ~20T and China with ~14T. They are the only two nations with a GDPs at or above 10 trillion, how could India have joined them in that distinction by today?
AHC: India with a 10 trillion GDP
- Thread starter Malone
- Start date
So you want an India with a China sized economy... That's hard.
Maybe a better transition away from colonialism? No Pakistan? (The India/Pakistan rivalry caused both countries to invest heavily in a strong military, which meant less money for solving poverty).
Maybe a better transition away from colonialism? No Pakistan? (The India/Pakistan rivalry caused both countries to invest heavily in a strong military, which meant less money for solving poverty).
it wouldn't have to exactly match China's economy but yes to at least 10 trillion. How hard would it be however? As late as the 1980s China and India had similar nominal GDPs. It wasn't until the 1990s that China propelled itself out of India's league.
I think that one thing that could've helped India grow a lot faster is to adopt the Asian Tiger growth model and avoid imposing License Raj. From 1949-early 1990s, I think that India really missed the opportunities for export expansion and suffered from restrictions imposed by the government. Under License Raj, Indian firms generally did not participate in foreign markets owing to excessive control on foreign currency and many entrepreneurs could afford to let their companies be inefficient and stagnant because competing firms without a license were unable to survive. Hell, some companies made a profit by acquiring inputs on the controlled market and selling them on the free market for higher prices!
India's economic liberalization in 1991 really helped Indian firms compete overseas (previously practically impossible), import better capital and machinery much more easily and force many inefficient firms, formerly protected by License Raj, to innovate and improve managerial ability and efficiency or be destroyed. With India capable of competing overseas, India can industrialize through export expansion (like the Asian Tigers) rather than import substitution. Studies indicate that export promotion is generally more effective than highly protected import substitution in expanding output and employment. Through export promotion, Indian firms can use the information gained from international competition to learn quality control, new products and techniques, and good management. Moreover, exports allow Indian firms to grow beyond the domestic demand growth.
It is noteworthy that Asian countries that followed this strategy early on are better off (in GDP per capita) compared to the India that focused on international competitiveness in the 1990s.
Of course, I am ignorant on Indian politics, so I'm not sure if this is a viable strategy with respect to the politics of the time.
India's economic liberalization in 1991 really helped Indian firms compete overseas (previously practically impossible), import better capital and machinery much more easily and force many inefficient firms, formerly protected by License Raj, to innovate and improve managerial ability and efficiency or be destroyed. With India capable of competing overseas, India can industrialize through export expansion (like the Asian Tigers) rather than import substitution. Studies indicate that export promotion is generally more effective than highly protected import substitution in expanding output and employment. Through export promotion, Indian firms can use the information gained from international competition to learn quality control, new products and techniques, and good management. Moreover, exports allow Indian firms to grow beyond the domestic demand growth.
It is noteworthy that Asian countries that followed this strategy early on are better off (in GDP per capita) compared to the India that focused on international competitiveness in the 1990s.
Of course, I am ignorant on Indian politics, so I'm not sure if this is a viable strategy with respect to the politics of the time.