Top India Analysts Dispel "India's Size Illusion"

[Riaz Haq]

India's leaders and their western boosters have been promoting the country as an emerging superpower to counter rising China. They cite the size of India's economy, demography, military and consumer market to back up their assertions. These claims are challenged by India's former chief economic advisor Arvind Subramanian and Josh Felman, former head of IMF in India, in an article titled "India's Size Illusion".  In a similar article titled "The Chinese Threat No One Is Talking About — And How to Counter It", Sameer Lalwani, a senior fellow for Asia strategy at the Stimson Center, has raised serious questions about India's ability to counter China in the Indian Ocean region. 

Modi Claims 56 inch Chest

Modi's 56 inch Chest:

"Desh ka bahut nuksaan hua hai", acknowledged Indian Prime Minister Narendra Modi after his military's 2019 failures against Pakistan in Balakot and Kashmir. This marked a major shift in Modi's belligerent tone that has been characterized by his boasts of "chhappan inch ki chhati" (56 inch chest) and  talk of  "munh tor jawab" (jaw-breaking response) and "boli nahin goli" (bullets, not talks) to intimidate Pakistan in the last few years.  These events should force India's western backers to reassess their strategy of boosting India as a counterweight to China.

India's Illusions:

Indian government's former Chief Economic Advisor Arvind Subramanian has enumerated and challenged arguments for what he calls "India's Size Illusion" as follows:

1. India’s economic size has not translated into commensurate military strength. Part of the problem is simple geography. (German Chancellor Otto Von) Bismarck (1815-1898) supposedly said that the US is bordered on two sides by weak neighbors and on two sides by fish. India, however, does not enjoy such splendid isolation. Ever since independence, it has been confronted on its Western frontier by Pakistan, a highly armed, chronically hostile, and often military-ruled neighbor. More recently, India’s northern neighbor, China, also has become aggressive, repudiating the territorial status quo, occupying contested land in the Himalayas, reclaiming territory in the east, and building up a large military presence along India’s borders. So, India may have fish for neighbors along its long peninsular coast, but on land it faces major security challenges on two fronts.

2.  Then there is the question of market size. As Pennsylvania State University’s Shoumitro Chatterjee and one of us (Subramanian) have shown, India’s middle-class market for consumption is much smaller than the $3 trillion headline GDP number suggests, because many people have limited purchasing power while a smaller number of well-off people tend to save a lot. In fact, the effective size of India’s consumer market is less than $1 trillion, far smaller than China’s and even smaller relative to the potential world export market of nearly $30 trillion.

Indo-Pacific Dominance:

In an article titled "The Chinese Threat No One Is Talking About — And How to Counter It", Sameer Lalwani, a senior fellow for Asia strategy at the Stimson Center, has raised serious doubts about India's ability to counter China in the Indian Ocean region. Here are a couple of excerpts from the article:

1. China has been building dozens of advanced warships that seem poised to head toward the vast body of water through which 80 percent of global seaborne trade transits.....Indeed, a deeper (US) partnership with India — the world’s largest democracy, on an upward economic trajectory, seemingly perfectly positioned to counter China on land and at sea — has been something of a holy grail for at least four U.S. administrations.......Yet what former Secretary of State Hillary Clinton a decade ago called a “strategic bet” on India does not seem to be paying off. Indian naval and political power in the Indian Ocean region is faltering, giving way to influence by Beijing. Many of these problems are of India’s own making.

2. There is increasing discussion and advocacy among China’s foreign policy scholars and former officials about an Indian Ocean fleet. Indeed, the idea is consistent with China’s efforts to acquire military facilities in the Horn of Africa, on Pakistan’s Indian Ocean coast, in Myanmar and in the UAE, which offers access to the Persian Gulf. China has also engaged in intelligence collection efforts in the region and increased its port visits and diplomatic presence.

India's "Accidental" Missile Firing:

India's March 9 "accidental firing" of Brahmos nuclear-capable supersonic cruise missile into Pakistan has raised serious questions about the safety of the Indian nuclear arsenal. Do the people in charge of India's nukes have basic competence to handle such weapons? Was this really an "unauthorized" or "accidental" firing? Why was there a long delay by New Delhi in acknowledging the incident?  Could Pakistan be blamed if it assumed that extremist right-wing Hindu elements had taken control of the missile system in India and fired it deliberately into Pakistani territory? Has the Indian government risked the lives of 1.6 billion people of South Asia?

Could this "errant" missile brought down commercial passenger planes that were in the air at the time of this "accidental" firing? Here's an excerpt from Bloomberg detailing air traffic in the flight path of the Indian Brahmos:

"Several planes passed through the direct trajectory of the missile that day, which flew from the Indian garrison town of Ambala and ended up in Mian Channu in Eastern Pakistan. They included a Flydubai jet heading to Dubai from Sialkot, an IndiGo plane going from Srinagar to Mumbai and an Airblue Ltd. flight from Lahore to Riyadh. All crossed the missile’s trajectory within an hour of its accidental launch, data from flight-tracking application Flightradar24 show.  Other international flights in the vicinity of the missile’s trajectory -- and within its range -- included a Kuwait Airways Co. jet heading to Guangzhou, China from Kuwait City, a Saudi Arabian Airlines flight to Riyadh from New Delhi, and a Qatar Airways service from Kathmandu to Doha, the data show. No advisory to pilots operating in the vicinity -- known as a notice to airmen or NOTAM -- was issued". 

India: A Paper Elephant:

In an article titled "Paper Elephant", the Economist magazine talked about how India has ramped up its military spending and emerged as the world's largest arms importer. "Its military doctrine envisages fighting simultaneous land wars against Pakistan and China while retaining dominance in the Indian Ocean", the article said. It summed up the situation as follows: "India spends a fortune on defense and gets poor value for money".

After the India-Pakistan aerial combat over Kashmir, New York Times published a story from its South Asia correspondent headlined: "After India Loses Dogfight to Pakistan, Questions Arise About Its Military".  Here are some excerpts of the report:

"Its (India's) loss of a plane last week to a country (Pakistan) whose military is about half the size and receives a quarter (a sixth according to SIPRI) of the funding is telling. ...India’s armed forces are in alarming shape....It was an inauspicious moment for a military the United States is banking on to help keep an expanding China in check".

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[Riaz Haq]

#WorldHappinessReport: #India among unhappiest nations, languishes at 136th spot. In #SouthAsia, only Taliban-ruled Afghanistan fared worse than India. #Afghanistan was named the most unhappy country in the world, ranking last on the index of 146 countries

https://indianexpress.com/article/india/world-happiness-report-indi...


India continued to fare poorly in the world happiness index, with its position marginally improving to 136 as against last year’s 139.

Among the South Asian nations, only Taliban-ruled Afghanistan fared worse than India. Afghanistan was named the most unhappy country in the world, ranking last on the index of 146 countries. Nepal (84), Bangladesh (94), Pakistan (121) and Sri Lanka (127) managed to get better ranks in the list.

Finland topped the list for the fifth time in a row, according to the 10th edition of the World Happiness Report.


Finland was followed by Denmark, Iceland, Switzerland, and the Netherlands. Among other western countries, while the United States managed to bag the 16th position, Britain was ranked 17th and France 20th.

The Happiness report also stated that India was one among the countries that witnessed, over the past 10 years, a fall in life evaluations by more than a full point on the 0 to 10 scale.

[Riaz Haq]

'We may soon top hate and anger charts': Rahul Gandhi after #India ranked below #Pakistan in #WorldHappinessReport2022. #Modi #BJP #Hindutva #Islamophobia #hate
https://www.freepressjournal.in/india/we-may-soon-top-hate-and-ange...

In the World Happiness Report 2022, India saw a marginal improvement in its happiness ranking. The country jumped three spots this year to 136. However, India is ranked even below Pakistan and Bangladesh, which are placed at 121 and 94 respectively.

Meanwhile, in an apparent jibe at the Prime Minister Narendra Modi-led ruling dispensation, Congress leader Rahul Gandhi on Saturday said India would soon top hate and anger charts.

Taking to Twitter, he wrote: "Hunger Rank: 101, Freedom Rank: 119, Happiness Rank: 136. But, we may soon top the Hate and Anger charts!"

Finland has been named the world's happiest country for the fifth year running, while Afghanistan has been named the unhappiest, closely followed by Lebanon.

The United States rose three places to 16th, one ahead of Britain. France climbed to 20th, its highest ranking yet.

The World Happiness Report ranks countries based on several factors such as real GDP per capita, social support, healthy life expectancy, freedom to make life choices, generosity and perceptions of corruption.

It is based on two key ideas – happiness or life evaluation measured through opinion surveys and identifying key elements that determine well-being and life evaluation across countries.

[Riaz Haq]

Christopher Clary
@clary_co
"If the logic of a multipolar world leads to a ‘unipolar Asia’ led by China, India might find itself in the fire rather than the frying pan. If... India’s main objective is to construct a ‘multipolar Asia’, it would need the cooperation of the US..."

https://twitter.com/clary_co/status/1507508975364935685?s=20&t=...

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Diplomacy for the new decade

C. RAJA MOHAN (2010)

INDIAN diplomacy has ended the first decade of the 21st century on an impressive note. The rash of civil nuclear cooperation agreements that Delhi has signed with many countries in 2009 underlines the significance of the controversial but consequential Indo-U.S. engagement through the decade. Delhi’s outreach to Washington, despite the persistent scepticism on the left and right of the Indian political spectrum, not only ended three and a half decades of Indian isolation on global nuclear issues but also created new space for Delhi in dealing with the unending conflict with Pakistan, and catapulted India into the same league as a rising China in international perceptions. Put simply, three long-standing objectives of Indian foreign policy – a claim to parity with China, elevation above Pakistan, and the acceptance of its status as a nuclear weapon power – were all realized substantively, if not in a full measure.


https://www.india-seminar.com/2010/605/605_c_raja_mohan.htm

Pacifying the Trans-Indus Territories: Although the renewed American focus on Afghanistan and Pakistan under the Obama Administration has concentrated the whole world’s attention on this region, our north-western frontiers have always been the major source of external threat to India. For millennia, the turbulent region between the Indus river and the Hindu Kush mountains has attracted foreign invaders and challenged the authority of large empires in the Indian heartland. That basic framework has not changed after the Partition and Independence. For more than sixty years, all of India’s external and internal security challenges expressed themselves together and in the sharpest possible form in the trans-Indus regions. That context has only become more acute at the turn of the decade, as the U.S. escalates the war in Afghanistan in what could be one last shot at regaining the initiative, and the militants retaliate by stepping up terrorist attacks all across urban Pakistan.



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While sceptics are right to caution against exaggerated expectations on what the world can deliver in Pakistan and Afghanistan, India loses nothing in engaging the Obama Administration in a purposeful dialogue. Given the scale of threat that Pakistan poses to the region and the world, the real dangers of a collapsing nuclear state in Pakistan, and prospect of Al Qaeda and its affiliates establishing a permanent home in the Af-Pak region, the U.S. can no longer conduct business as usual in Pakistan. The question for India is not whether it should work with the rest of the world in stabilizing the Af-Pak region, but how best we can leverage the current international interest in the subcontinent.

Meanwhile India must continue to develop its own independent policy towards Afghanistan and Pakistan. During the last few years, India has emerged as a major investor and partner of post-Taliban Afghanistan. The UPA government has also invested heavily in finding lasting peace with Pakistan and settling all outstanding disputes including Jammu and Kashmir. While the peace process has stalled since the Mumbai terror attacks in November 2008, India’s objective cannot be a simple return to the old framework of the composite dialogue. Delhi must instead find an approach that will strengthen our potential partners for peace in Pakistan and isolate those who are irreconcilably hostile to normalization of relations with India.

[Riaz Haq]

#India's External Affairs Minister: '#China shouldn't allow #Pakistan to dictate its #India policy'. Jaishankar hosted #Chinese FM in #Delhi 2 days after #Modi gov't strongly criticized Wang's statement in support of #Kashmiris' rights at #OICInPakistan. https://www.deccanherald.com/national/china-should-not-allow-pakist...

China should not allow its policy towards India be influenced by Pakistan, External Affairs Minister S Jaishankar tacitly conveyed to his counterpart in the communist country's government, Wang Yi, on Friday.

“I referred to it. I explained to him why we found that statement objectionable,” the External Affairs Minister said after his meeting with the Chinese Foreign Minister. “There was a larger context as well. You know, I conveyed that we hoped that China would follow an independent policy in respect of India, and not allow its policies to be influenced by other countries and other relationships.” Wang had on Wednesday attended a meeting of the OIC hosted by the Government of Pakistan. He had made a statement endorsing the OIC's support for the movement for “right to self-determination” in Jammu and Kashmir.

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China had in 2019 joined its “iron-brother” Pakistan to launch a campaign against India at the United Nations and other international forums, opposing the move made by the government led by Prime Minister Narendra Modi to strip Jammu and Kashmir of its special status and split the state into two union territories.

[Riaz Haq]

#China's #birth rate in alarming decline. Could it impact #Chinese #economic growth rate? Could China get old before it gets rich? Is #India better placed than China in terms of #demographics? #population #economy #fertility https://www.scmp.com/economy/economic-indicators/article/3171867/ch...

https://twitter.com/haqsmusings/status/1507741000378187777?s=20&...

Cai Fang, a member of the People’s Bank of China’s monetary policy committee, said it is ‘entirely possible’ that the world’s largest population will peak in 2022
Yicai reported that seven out of the 16 provinces that have so far disclosed birth data saw negative population growth in 2021

China’s population is likely to peak this year, a central bank adviser said, with several provinces already reporting declines in the population growth rate.
Cai Fang, a member of the People’s Bank of China’s monetary policy committee, said it is “entirely possible” that the world’s largest population will peak in 2022, according to a report in the 21st Century Business Herald.
Separately, Yicai reported that seven out of the 16 provinces that have so far disclosed birth data saw negative population growth in 2021.
With a declining labour force already acting as a constraint on the supply side of the economy, a shrinking population will become a new restriction on the demand side, Cai said late on Friday.

A mismatch between demand and supply would curb economic growth, he said.
One way to boost demand is by granting migrant workers who work in the city residency permits, known as a hukou, Cai said, predicting the move alone could grow total consumption by 30 per cent.
A hukou is a household registration document all Chinese citizens must have that controls access to public services based on the birthplace of the holder. Migrant workers will hold hukou from their hometowns, meaning that they will have very limited rights to public services in any other city that they move to for work.
China should also take concrete measures to support household income growth, Cai said, to cope with the new demographic changes.

China had a population of 1.4126 billion at the end of last year, with the growth rate rising at the slowest pace since the 1950s.
The number of babies born in China in 2021 was 10.62 million, down from 12 million in 2020, according to the National Statistics Bureau.
Populations in the provinces of Jiangsu and Hubei, as well as in the Inner Mongolia, autonomous region, dropped for the first time in recent decades, according to the Yicai report.
The biggest decline was in Heilongjiang, where the population fell by 0.51 per cent last year, it said.
Adding to the trend, a separate Yicai report said the number of marriages in 2021 hit the lowest since records began in 1986. The 7.6 million registrations last year was 56.6 per cent of the peak reached in 2013, it said.

[Riaz Haq]

#China's #birth rate in alarming decline. Could it impact #Chinese #economic growth rate? Could China get old before it gets rich? Is #India better placed than China in terms of #demographics? #population #economy #fertility https://www.scmp.com/economy/economic-indicators/article/3171867/ch...


A social media post in early March claiming that India had become the world’s most populous country created a storm in China.
The post claimed India’s population had hit 1.415 billion and was widely shared on social media, adding to rocky relations between Beijing and New Delhi and concerns over domestic growth hurdles in China, while also fuelling discussions about a host of social issues.
Demographic issues have been a hot topic in China since last year, when the once-a-decade census found the national fertility rate was alarmingly low.

[Riaz Haq]

Why #Citibank left #India. Some experts have blamed Indian #banking’s bad-loan crisis. Citi, which has been present in India for over a century, is not the first foreign bank to exit or scale down operations. #Modi #economy #BJP #Hindutva https://qz.com/india/2148597/ via @qzindia

Almost immediately after Citigroup’s announced its decision last year, FirstRand Bank, too, followed suit. South Africa‘s second-largest bank has $118 billion in assets in India.

Barclays, HSBC and Bank of America-Merrill Lynch, too, have downsized due to high capital requirements and costs.

Foreign banks have been struggling due to increased competition from domestic players, differences in compliance guidelines, and poor asset quality issues, among other reasons.

Some experts have blamed Indian banking’s bad-loan crisis.


“We believe our capital, investment dollars, and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia,” Citigroup’s global CEO Jane Fraser had said last year.

In 2013, RBI had announced guidelines for foreign banks, asking them to either operate through branch presence or set up wholly-owned subsidiaries to be treated at par with Indian banks. While the business models of some banks did not allow the subsidiary route, only a few got licences to open fresh branches.

Some have survived, though.

[Riaz Haq]

#India #Electricity Crisis Worst Since Oct 2021: Many northern states suffered hours-long power outages in October, when a crippling #coal shortage caused the worst electricity deficit in nearly five years. #EnergyCrisis #BJP #Modi #economy #unemployment https://www.hindustantimes.com/india-news/indias-march-electricity-...

The western state of Gujarat, one of the country's most industrialized, has ordered a staggered shutdown of "non-continuous process" industries in key cities next week, according to a government note reviewed by Reuters.


India's electricity shortage from March 1 to March 30 was its worst since October, a Reuters analysis of government data shows.

A surge in power demand in March has forced India to cut coal supplies to the non-power sector and put on hold plans for some fuel auctions for utilities without supply deals due to a slump in inventories.

Many northern states suffered hours-long power outages in October, when a crippling coal shortage caused the worst electricity deficit in nearly five years.

Shortages in the eastern state of Jharkhand and Uttarakhand in the north surpassed those of October, the latest data showed.

The western state of Gujarat, one of the country's most industrialised, has ordered a staggered shutdown of "non-continuous process" industries in key cities next week, according to a government note reviewed by Reuters.

A Gujarat energy department official said the move was due to power shortages and to facilitate continuous power supply to farmers, adding a similar strategy was last used in 2010. He declined to comment on how long the staggered shutdown will be in place.

The official declined to be named as he was not authorised to speak to the media.

The southern state of Andhra Pradesh and the tourist resort state of Goa, which registered marginal shortages in October, suffered deficits several times larger in March.

The deficit in March was 574 million kilowatt-hours, a measure that multiplies power level by duration, a Reuters analysis of data from federal grid regulator POSOCO showed.

That amounted to 0.5% of overall demand for the period, or half the deficit of 1% in October.

The northern states of Haryana, Rajasthan and Punjab and the eastern state of Bihar, some parts of which suffered widespread outages in October, accounted for most of the deficit in March, but shortfalls were lower, the data showed.

[Riaz Haq]

The #Hindu Right is turning against the #US. Until a few years ago, #Modi Bhakts were largely pro-US. Now, Joe #Biden is seen as antagonistic — if not to #India, then to the sort of India that Modi’s supporters want to create. #Hindutva #Islamophobia https://theprint.in/opinion/the-hindu-right-is-turning-against-the-...


By VIR SANGHVI


Even while the war in Ukraine rages, however, we should be asking ourselves deeper questions. A few days ago, at the ABP Ideas of India Summit in Mumbai, I interviewed Fareed Zakaria. Fareed’s view was that over the last decade or so, India has become so inward-looking and obsessed with its own issues and divisions that it has not spent enough time thinking about its place in the world, going forward.

While we have been obsessed with headscarves and caste arithmetic, the world has rearranged itself. No matter what happens in Ukraine, Russia will come out of the war damaged. If it makes peace, then some of the sanctions imposed on it by the West may be moderated but it seems unlikely that Putin’s Russia will become a full-fledged member of the global economy for a long time.

In that case, it will have no choice but to move into the Chinese sphere of influence. One scenario sees Russia as a classic vassal state of the Chinese, supplying energy and raw materials to feed the Chinese military machine and its industrial complex. Pakistan and China are longstanding allies, so we will probably see the emergence of a Russia-China-Pakistan alliance.

India will then have two choices. Either we agree to accept China’s suzerainty over the East. Or we look for other options.

Should we choose the second path (and I imagine we will have to), then there really is nowhere to go but the West. At present, the West understands how India is constrained by its dependence on Russian weaponry. But in the long run, it will expect a greater measure of alignment. Is that something we have considered? Or are we too blinded by the rhetoric about anti-Hindu America and hypocritical Washington?

Sooner, rather than later, we will have to rescue reality from the rhetoric.

[Riaz Haq]

#US Professor Calls #India "Sh*****E". "They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” UPennProfessor Amy Wax said. #Caste #Brahmin #Xenophobia #Hindu https://www.ndtv.com/indians-abroad/us-professor-calls-india-sh-e-i... via @ndtv

Leading Indian-Americans, including US Congressman Raja Krishnamoorthi, have slammed a law professor from University of Pennsylvania for her disparaging comments about the Asian American community, with a specific disdain for Indian-Americans.
In a recent interview to Fox News, Prof Amy Wax from the University of Pennsylvania alleged that “Blacks” and “non-Western” groups have “a tremendous amount of resentment and shame against western people for [their] outsized achievements and contributions.” “Here's the problem. They're taught that they are better than everybody else because they are Brahmin elites and yet, on some level, their country is a sh*thole,” Wax, who has a long history of inflammatory remarks, said.

She also said that the westerners have outgunned and outclassed the Asian Americans in every way.

“They've realised that we've outgunned and outclassed them in every way… They feel anger. They feel envy. They feel shame. It creates ingratitude of the most monstrous kind,” she said.

Wax then targeted the influential Indian-American doctors' community as well. “They are on the ramparts for the antiracism initiative for ‘dump on America,'” she alleged.

The comment was condemned by the Indian-Americans across the US.

“After President Trump left office, I thought the days of calling others “shithole” countries were over,” Krishnamoorthi said in a tweet.

“As an Indian-American immigrant, I'm disgusted to hear this UPenn Professor define Indian-American immigrants, and all non-white Americans, in such insulting terms,” he said.

Stating that such comments are borne of hatred and fear, he emphasised that such talks make it much harder to accomplish common-sense immigration reform.

“Comments like these are borne of hatred and fear, and they lead to real harm for my constituents and our minority communities. They fuel hate crimes against minorities, and they make it much harder to accomplish common-sense immigration reform,” Krishnamoorthi said.

Indian-American Law professor Neil Makhija also slammed Wax for her comments.

“It's irresponsible to use your position to lend credibility to these overtly racist sentiments that don't recognise Indian-Americans for who we are," he told Axios.

Indian-American Impact is slated to hold a summit next month in DC Makjiha told Axios he's planning to adjust programming to discuss the incident and create solutions against anti-Asian and South Asian hate in educational settings.

“The most unfortunate thing is that we have a lot of brilliant and incredible students at the law school,” he told NBC News.

“It makes you question whether she can fairly grade or educate,” he said.

This is not the first time Wax's controversial comments about race have gone viral, the US media reported.

Her appearance on Carlson's show is not the first time Wax has made anti-Asian remarks. In an interview in December, she said that Indians Americans should be more “grateful” to be in the US and that the country would be “better off with fewer Asians.” Penn has confirmed that the school is in the middle of disciplinary proceedings against Wax, NBC News reported.

“The University of Pennsylvania Carey Law School has previously made clear that Professor Wax's views do not reflect our values or practices,” it quoted a representative as saying.

“In January 2022, Dean Ruger announced that he would move forward with a University Faculty Senate process to address Professor Wax's escalating conduct, and that process is underway,” the report quoted the Penn representative as saying.