26 India
Welsh
India isn’t going to make it. Sorry, too many internal problems, too little time. To much corruption and the authoritarianism is clumsy and stupid (there is smart authoritarianism, India is not practicing it) and climate change is going to hit India fairly hard and early. But overall, the signs of takeoff aren’t there, and there isn’t enough time. India will be broken up by 2050 to 2060 and 2035 to 40 is entirely possible: when they have real crop failure, they will have famines which kill hundreds of millions and cause vast violence and displacements. And they are going to have vast crop failure.
Welsh (2023) National Futures In The Age of China & Collapse
Tooze
For deeper historical perspective on India’s growth outlook, you may wish to pick up Ashoka Mody’s typically fiery interpretation of India’s economic development since independence, which is being released by Stanford University Press this month.
Trigger warning: Mody’s treatment is a no bolds barred attack on “India boosterism”:
Challenging prevailing narratives, Mody contends that successive post-independence leaders, starting with its first Prime Minister, Jawaharlal Nehru, failed to confront India’s true economic problems, seeking easy solutions instead. As a popular frustration grew, and corruption in politics became pervasive, India’s economic growth relied increasingly on unregulated finance and environmentally destructive construction. The rise of a violent Hindutva has buried all prior norms in civic life and public accountability.
Mody does not deny the growth, which in recent decades has lifted hundreds of millions out of absolute poverty. But he also highlights mounting inequality, which now places India alongside South Africa and Brazil as one of the most unequal societies on earth.
India Stack
In many of the ex-colonies of European empires, biometric technology systems are being built under an ethos of welfare and financial service delivery. One case in this broader trend of postcolonial governance is India’s Aadhaar and India Stack. This paper uses this case to explore how the in-sourcing of technology into means of governing, behind a front of participatory “good governance,” is contributing to the historical trajectory of citizenship regimes in India. Through claims of reducing financial “leakages,” Aadhaar, a biometric identification database consisting of fingerprint, iris scan, and photograph, has become compulsory for accessing welfare in India. The Indian government makes a case for Aadhaar using a propaganda discourse of its success, based on weak evidence. The India Stack, a set of cloud-based application programming interfaces (APIs) built on top of the Aadhaar database, offers a digital infrastructure for private companies to verify identities using Aadhaar data and to offer other “services” including “financial services.” The ability to access data, paired with a “revolving door” of individuals between state and corporations, points to an ulterior goal of both Aadhaar and the India Stack: creating winners in the corporate and financial technology sectors. The Indian corporate-state run through a “governtrepreneurism” uses Aadhaar and the India Stack as new digital technologies of governmentality to transform populations into subjects or customers.
Delhi is selling “India Stack Global” as a model for tech and governance solutions worldwide, but particularly for middle- and low-income countries.
You cannot understand the genuine mass appeal of Prime Minister Modi and the BJP unless you recognize the way in which they have managed to associate themselves with a real and very dramatic transformation and at the same time to cast their opponents as those who for so many decades failed to deliver even the most basic services for India’s population. Following the Gujarat model of privatized infrastructure model, corporate interests are not shamefaced but front and center in this vision of nation-building. Nation-building is the key boast of the Adani group. And it is that model that is at stake in this crisis.
Tooze (2023) Indian nation-building, Modi and the Adani crisis
26.1 Industrialization
Noah Smith
Unlike China, India has grown to its current level without industrializing — that is, without increasing manufacturing’s share of the economy.
Basically, I think India has most of the raw ingredients necessary to industrialize. In particular, it has built an impressive amount of infrastructure in recent years, and is building much more, shoring up a key longstanding weakness. And high-speed rail is being built, using the same trains as Japan’s shinkansen. The India of unreliable slow trains and dirt roads is rapidly vanishing into history.
If India has one remaining weakness, it’s education.
In the West, those on the political Left have a curious tendency to downplay India’s growth and pooh-pooh its future chances. It is up to India’s leaders to prove these naysayers wrong.
But I am reasonably confident that they will, and the reason for my confidence has nothing to do with willful optimism or a mystical faith in the effectiveness of India’s people and India’s government. The reason is called “agglomeration effects”.
With production costs no longer low in China and geopolitical risk rising, multinational companies are going to be looking for alternative places to put their factories and offices. And those alternatives are likely to be in other parts of Asia, rather than in Latin America or Africa or elsewhere, in order to be close to existing supply chains and manufacturing expertise and sources of capital. And India is really the only other part of Asia whose sheer scale has any hope of matching that of China.
Apple is starting to bet big on India, shifting production of a variety of products. In 2021, only 1% of iPhones were made in India; two years later, it’s approaching 7%, with a planned increase to 40-45%.
Unlike China, India doesn’t mount a massive government campaign to copy (or steal) the technology of multinational companies that invest there, then transfer that technology to state-supported domestic champions. And although India has plenty of regulation, it doesn’t have China-like arbitrary state control that reaches into every economic sector in ways that are difficult for multinational companies to anticipate.
Comments on Smith
“Indian polity revolves around those who believe that India went through single colonization (European) vs those who believe India went through double colonization (Islamic and European)” Everything about Indian politics will make sense if one understands above statement.
Smith
In my last post, I predicted how manufacturing would spread to India and other developing countries in South and Southeast Asia. Basically, India will start out doing low-value assembly work using imported tools and components, and then gradually work its way up the value chain. Right now, in terms of its position in the supply chain, India is about where China was in the early 2000s.
Viola Zhou and Nilesh Christopher have a wonderful article about what Indian industrialization looks like on the ground. They traveled to a Foxconn factory in southern India, where Apple has shifted some iPhone production in order to diversify out of China. They found that many of the engineers that have been brought over to train and supervise the Indian factory workers are themselves Chinese. Much of their reporting focuses on the interaction and culture clash between the factory’s Chinese and Indian workers.
The story that emerges is a very familiar one. The Chinese supervisors think the Indian workers are slow, lazy and undisciplined — just as the British once thought of German and Japanese workers, when those countries were first industrializing. Industriousness is learned; it proceeds from industrialization. The people who first come to work in the labor-intensive factories are mostly women, looking for independence and an escape from rural life (and probably advantaged by having small fingers). The Indian factory girls are recognizably similar to their Chinese predecessors, or their British forebears centuries ago.
This is the universal tale of industrialization, and it’s a beautiful and terrible one at the same time. It’s a story of ruthless labor exploitation, urban ennui, and harsh working conditions. But it’s also the story of workers escaping what Marx called “the idiocy of rural life”, finding their own way in the world, making money and winning their independence. And it’s the story of a country that is primed to become much richer in the near future.
We know how this story typically ends, too. Indian factories will become more automated; salaries will rise and assembly line jobs will become fewer and more technical. Indians will move into higher-paying service jobs with better conditions. Indian companies will move up the value chain, learning how to make tools and components, eventually creating their own brands and competing with China and the rest of the industrialized world. And then Indian engineers will be off to the next poor country — Bangladesh? Ethiopia? Nigeria? — to start the whole process over again.
I was struck by this paragraph:
Li said Chinese engineers sometimes talked about how they were working to make their own jobs obsolete: One day, Indians might get so good at making iPhones that Apple and other global brands could do without Chinese workers. Three managers said some Chinese employees aren’t willing teachers because they see their Indian colleagues as competition. But Li said that progress was inevitable. “If we didn’t come here, someone else would,” he said. “This is the tide of history. No one will be able to stop it.”
Anyway, if you have the time, go read the whole thing.