Controversial: India will never overtake China or US
..unless either of the two mess up insanely bad We'll probably get to the #3 spot if things go well. But it seems impossible that we'll ever go beyond that. Internal reasons that are very hard to fix:- (1) Our population TFR fell below standard replacement rate in 2023. This means we will not be able to follow the same economic growth trajectory required to reach developed status before population stagnation or declination. This is not a death knell but definitely very VERY bad news. (2) Our blue-collar workforce skill levels are not only subpar but are slowly falling behind the world standards every year. Much of our youth aim to join government orgs like the Army or the Railways which train for the job later, not before. Despite a national shortage of skilled plumbers, electricians etc, our vocational training orgs have been unsuccessful in attracting people towards these careers as well as churning out skilled workers. (3) Our bureaucratic environment is extremely slow with pathetic turnaround times on initiatives. This is not government specific and has always been the case so it seems like this will always be. This is not even a problem unique to India as many other countries have been facing this too but it is still a factor that negatively impacts our growth massively. I wish it was just internal reasons but a large part of it also comes down to both China and US being aggressively great at ensuring their successes:- (1) Chinese manufacturing seems nearly impossible to overcome - not just for India but also for the US. Yes, we might win over some industries and companies like the US, Vietnam, Thailand etc. have been doing but the amount of autocratic control in China allows them to crush competition easily. Case in point - the recent tussle between India and China on solar manufacturing which China won by autocratically lowering their prices. (2) If de-dollarisation succeeds, it will benefit China the most because (contd. in comments)
Indusplateau
Stealth
8 months ago
Let's do our part, instead FOMO, have an abundance mindset,keep building and shipping.
Yes, I agree. #3 won't be too bad (in fact fantastic), if we get there.
The question we should be asking ourselves is how do we get there? This is a question all of us should be discussing with each other despite our differences. The day we stop having constructive conversations with each other is the day we stop making meaningful progress.
Indusplateau
Stealth
8 months ago
From a global macro point of view, We are going to definitely have broken supply chain, we need to ramp up manufacturing. I am sure we can't do it like China did with cheap labour so we need to leap frog to robotic manufacturing.
We have done this in the past, we leapfrogged to service sector from agri without manufacturing, we leapfrogged to mobile first without computers.
We should leapfrog to robotic manufacturing.
The Worlds biggest disadvantage is our strength that is we have working age population. We have the potential have teleoperated robotic services across the west and aging countries.
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BiryaniEnthu
Stealth
8 months ago
This is such a great great read!
Talking solely about China, the economy is very closed and guarded. We don't have exact numbers of the quantum of Chinese businesses, and eventually military funding.
Though US, could go messing up if their government continues depleting resources like this. Insane inflation will break the bones.
Imagine what would China be like if their economy wasn't closed off to the rest of the world due to sanctions and restrictions. I think they would've already beaten the US.
I agree that the US is living life dangerously at the moment :P But I also think they have some headway to recover their lead if things do go wrong.
BiryaniEnthu
Stealth
8 months ago
China would have gone downhill, if they had. Too many cooks.
Some friends have been to Beijing and Shanghai say the infrastructure is beyond what they have seen in any country.
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(2) If de-dollarisation succeeds, it will benefit China the most because of their already strongly established trade relations in their currency (due to manufacturing) as well as their carefully laid out financial obligations (AKA debt traps) throughout the world - also in their currency.
(3) Believe it or not, everything points to AI becoming a gargantuan contributor to economies a decade down the line. The US, followed by China are way ahead of any competition here. And they will reap much of the benefits. India has barely begun it's AI journey while they have a decade (maybe more) of headstart under their belt.
(4) There’s a ton of other geopolitical, military and resources based factors but those are smaller ones compared to the above IMO.
@AITookMyJob Your point about de-dollarization is incorrect. Many countries use dollar not because they like US but because US is the country that can offer "Demand" for their products and can run large current account deficits (https://en.wikipedia.org/wiki/Current_account_(balance_of_payments). Apart from sanctioned countries, all these countries trade in USD as it's in their best interests to do so. China for economic and cultural reasons, cannot run a deficit (let alone a large deficit like US) and can only offer "Supply". Unless Xi Jingping suddenly changed decided to demolish their industries and becomes a large importer overnight, de-dollarization is not happening.
Indusplateau
Stealth
8 months ago
@3xPlusOne you should research more on debasement of us dollar and their debt. Read how hyperinflation happen. Somehow they have tightly held the system for now. They are just a mistake away from a crisis bigger than 2008
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It's a very superficial take. First, China's economy is not manufacturing-led, but real estate as RE makes up about 30% of their GDP. Not to mention that Chinese government doesn't use GDP as a proxy for economic development as other countries do, but instead sets annual GDP growth targets. Each province try its best to reach that target using infrastructure spending, which is why many economists like Michael Pettis consider China's GDP figures as a system input, rather than outputs. If you go by the night-time satellite data, many reports suggest that China's GDP might be 60% of its claimed figures and India might already be 1/2 of Chinese GDP.
Further, everything China does can be explained by "Overcapacity" - a key factor that explains why their products are quite cheap. CCP in China builds/manufactures stuff just for the sake of achieving the GDP. Their infrastructure, while very shiny, is mostly made of very poor quality. As the saying goes, "Why build it once, if you can demolish and build it multiple times". This phenomenon is not just limited to infrastructure. Imagine you are a manufacturer in a normal country, and you manufacture and sell a product (say 'wrench'). The amount you manufacture is highly dependent on the demand as inventory is costly and thus determines whether you increase or decrease the production. But in China, the State-Owned corporations get large amounts of subsidies and virtually unlimited funds. Based on the target growth figures set by CCP, the company simply keeps manufacturing the product regardless of demand as it contributes to the GDP. These companies then find a way to sell their products overseas, even if it's at a loss. This is the key reason why countries like India have anti-dumping laws.
Second, your point " Our population TFR fell below standard replacement rate in 2023. This means we will not be able to follow the same economic growth trajectory required to reach developed status before population stagnation or declination. This is not a death knell but definitely very VERY bad news" is completely wrong. The growth of an economy is determined by the dependency ratio (dependents / total workforce), not TFR. The dependency ratio can be high if there are too many kids or elderly. Now due to the declining birth rate, India's dependency ratio is reaching a goldilock zone where we typically witness demographic dividends.
First of all, I feel the need to clarify that I love India (my Bharat) and would give an arm and a leg for it. My thought comes from a place of deep concern and not supercial analysis. Every nationalist should start contemplating and having constructive discussions on how to enhance our nation and this is one of them.
Secondly, dependency ratio is an unproven and unreliable way to measure and predict the chances of the long term growth of an economy. Your claim about TFR being useless is not correct as we have plently of examples in South-east Asia itself of countries that have reaped the benefits of a good TFR. Here's a paper by the IMF that suggests why we should enable career women to become mothers as a way to tackle low fertility rate: https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/new-economics-of-fertility-doepke-hannusch-kindermann-tertilt
samosa
Stealth
8 months ago
who cares, as long as we build new hindu temples regularly
Believe it or not, they contribute a lot to our GDP (2.5% or INR 3.2 lakh crores last I checked). These figures are by NSSO - the same org which released unemployment figures that made us question the government on what tf it has been doing. If you have any false beliefs that temples are not contributing massively to our economy, then you need to have an open mind and research more, my friend.
samosa
Stealth
8 months ago
i meant that only, i already know the numbers
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Very good, if we get there. But my point was something else entirely:-
It will probably not be "India's century" as many people claim but much more likely to be "China's century".
Time will tell, century of X/Y is just a marketing gimmick. We know where China leads, lacks.
My honest takeaway from all the things happening around is - I am a strong believer of wealth has a trickle down effect, we have proof points from 90s. As macro factors are improving, we can hope for a better (financial) living standards for generations to come.
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Indusplateau
Stealth
8 months ago
From a global macro point of view, We are going to definitely have broken supply chain, we need to ramp up manufacturing.
I am sure we can't do it like China did with cheap labour so we need to leap frog to robotic manufacturing.
We have done this in the past,
we leapfrogged to service sector from agri without manufacturing,
we leapfrogged to mobile first without computers.
We should leapfrog to robotic manufacturing.
The Worlds biggest disadvantage is our strength that is we have working age population.
We have the potential have teleoperated robotic services across the west and aging countries.
Agreed. Amping up manufacturing should have happened yesterday - it is that important.
I'm not sure how we would go about leapfrogging this time to robotic manufacturing to be honest.
Indusplateau
Stealth
8 months ago
That is the constructive discussion we need to do here. Every country is gonna try robotics and leverage it. The good thing is we have consumerism so we can bootstrap the initial demand and experimentation before we focus on exports.
I attended IMTEX 2024, I was amazed at what the industry has achieved without the Techies, we should just work these folks to advance their products.
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LayMan
Stealth
8 months ago
There's no controversy
LayMan
Stealth
8 months ago
Guilty as charged. The delusion is unreal.
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Sugar
Stealth
8 months ago
Yes, not with this attitude
We need extreme optimism, if not our generation atleast the next generation will do
I agree, extreme optimism does help a lot. But I'm more of a constructive figure-out-how kind of a person. I would much rather ask questions and figure out how we'll get there than have optimism that someone or something else will get us there. Once we have good solutions (which I do believe we're capable of finding), insane levels of optimism will make a lot of sense.
Till then, better to keep thinking and asking questions.
Sugar
Stealth
8 months ago
Extreme Optimism along with figure-out-how, not alone optimism can take us there, but we should never ever publicly talk about pessimistic views, it creates doubts in the minds of people around you, it instills fear and change of perception. By discussing pessimistic views publicly like this you have impacted or created doubt in the mind of atleast a single person here who will go on to choose another country over India. It's an L
"Will never overtake, VERY bad, bureaucracy is pathetic, impossible to overcome" are the kind of words you are using.
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Cultural aspects:
Most people believe that an important part of any company's success is its culture. "Culture eats strategy for breakfast" is the popular saying, I believe. Amd I think the same surely does hold true for countries as well. A country that's divided will not stand well and we've unfortunately been partitioned a few times with some factions asking for even more partitions. Strong cultural undercurrents laid a foundation for both US and China's successes. For 1 example - the US with their freedom spirit during their independence and Lincoln's revolution or China's nationalism movement for their Century of Humiliation after getting over Mao Zedong's brutal regime. I'm not glorifying or defending either US or China but trying to explain the role that cultural factors can play.
Grub96
Student
8 months ago
makes sense. india has no unifying culture. i won't be possible to have something like that in india
US was somewhat multicultural too (definitely not as much as us) but they built a unifying foundation of culture based on the values of freedom 🦅 and Christianity.
What can we do to unify our masses on 1 value or objective, if anything at all?
I agree..with all points....we will grow in terms of population for atleast 2 decades ..before we start seeing adverse effects of low TFIR...we will almost be trapped in mid income status...on the top housing crisis will be real due to shortage of blue collar workers...we may also witness high food inflation in 2-3 decades as more and more next generation people from farming community are moving to tows ..on another note we will be witnessing an ever aggressive minorities especially Muslims thanks to their higher fertility rates (2.7 in Muslims vs 1.7 in Hindus)...we may face frequent communal clashes leading to fleet of investor or lost confidence amongst investor community ...
Hope at least one amongst the above doesn't happen .
Blue collar worker shortage -agreed
Population risks - agreed
Food inflation - possible but less likely, solvable
Communal demographic risks - agreed but few countries have managed to solve that too with large scale missionary programs and simple spread of atheism :P
Difficult bro...large population ...things will go haywire even if 1% of the minority population decide to take law in their hands ....we have seen that happening in Manipur where relentless demographic change came with serious ramifications..although news has been suppressed thanks to NE location of the state...any change in demographics especially in Gujrat, Maharashtra, UP, TN, Karnataka and Rajastan will be detrimental to the country's growth..
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Every civilization works in a cycle. Their own peak and valley can affect other civilization as well.
India was on its peak before maybe invasion. Then came the great Britain with their land and flag expansion strategy. They fall after a few centuries and the US rises. They rise based on military power and being a bully in geopolitics.
US is at their peak.
It'll start to fall but won't crumble.
Their biggest asset China is no longer loyal to them, so they need new partner.
They have started to realise that on the world's biggest roundtable they are still the loudest voice but others are silent like they were decades back. They have started speaking too (India and china).
Maybe not us but the next generation and next to next might not see the US as a big deal.
Agreed. We've had our time to be on the top of the world and others took it over. They will lose their spots too. My argument is that India might not be gaining the top spot in our lifetimes.
car_guy
Stealth
8 months ago
Difficult to do rapid growth in a democracy like India.
Difficult but not impossible. We do need strong governments with great willpower to make it happen.
DumNinja
Stealth
8 months ago
I would say it is virtually impossible to develop good in democracy. In India, even if you do good work, you have to work hard in elections. I think it's a broken system. There's not much incentive to work hard for the government when they might be replaced 5 years later.
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Grub96
Student
8 months ago
population reduction is a good thing tho. more population needs to reduce.
I think you mean population growth reduction, not population reduction 💀☠️
Grub96
Student
8 months ago
oh yes I meant that only. crazy how missing just one word can change the entire meaning 💀💀
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First of all, since this is mandatory these days, a PSA — I love India
I know your question comes form a curious PoV but why do we compare ourselves to China and US when the GDP per capita is comparable to Bangladesh and Pakistan?
All good points by multiple people here but here’s a sentence that reveals much more about the future of the country than most superficial numbers.
“In 2022, 44.6% Grade 8 students could do a 3 digit by 1 digit division.”
Since this platform has the cream of the country that’s probably responsible for the highest productivity per capita, think what’s required to be successful and what does it mean if half the children can’t do a simple division in class 8. What’s the future?
Ref — https://img.asercentre.org/docs/ASER%202022%20report%20pdfs/Articles/Basics%20and%20Beyond_Rukmini%20Banerji.pdf
There are dozens of examples of countries who've gone from a pathetic GDP per capita to a stellar one in a matter of decades (like Japan or South Korea or Singapore). Also, some say we might not even need to get to a stellar GDP per capita - as evidenced by Malaysia or China whose GDP per capita is 1/7th of developed countries but still have low poverty levels and great functioning welfare systems. These countries fell into the middle income trap so they don't have rich people everywhere (which we have fears of falling into as well) due to population growth and economic factors.
From what I understand, I don't think our GDP per capita is a factor in why we wouldn't reach the top spot. We have tons of economic factors in our favour (trade ratios, inflation, poverty alleviation rates, debt ratios) which are hard to solve normally and we've beat Bangladesh and Pakistan here by light years.
Lastly, I do think education in our country needs massive improvements (like I explained in my point 2). This is crucial and we should've fixed this yesterday. I agree that this will be a big thorn holding us back.
Yeah I guess those are valid points but event to get to where china is wrt to GDP per capita, we need to 5x it.
The only way I see this happening is if go all in on the services. I think we’ve already missed the manufacturing bus. And for services, we need a huge number of skilled, English speaking, young people.
Demon
Stealth
8 months ago
The entire point of being a democracy and growing is to take low risks unlike China.
The pros of China model is they will grow fast, the cons is that they will make big mistakes (like the current eCommerce bubble). They will grow fast and then they will shrink fast. We have seen this play out in Korea and Japan before China.
Win for India is keep on growing while avoiding bubbles over very long term. We have to be patient and avoid hedonism like our previous generations did. Another thing is that Indians are optimistic and willing to improve unlike other nationalities in current date.
America is between India and China in terms of risk reward spectrum in the sense it takes risk but failure is somewhat punishable. In China, the government is so powerful that it is both judge and jury taking big decisions, failing and no one gets punished. You can blame evergrande for current Chinese real estate problems, but they are just a product of government policy, so is their abysmal TFR.
Demon
Stealth
8 months ago
Chinese eCommerce mess I am talking of is ant group Alibaba etc.
Noctus
Stealth
8 months ago
The details in these thread is really great.
Indusplateau
Stealth
8 months ago
Just watch rocket boys and get white pill!
Things take time, Homi Bhaba and Sarabhai didn't complain about lack of resources. They just kept building.
Haha, yeah. We already have a lot of white pills. Our country doing better than it has ever done has brought on a layer of comfort and satisfaction in many folks. I think we need the opposite. I think we need a relentless urge to figure out how we can be doing even better and then communicate it constructively.
Indusplateau
Stealth
8 months ago
That's positioning and marketing.
This comes at later stage. First you prove your building capabilities.
Thats what China did for EVs in 2005-10.
TookTook
Stealth
8 months ago
Despite all the reasons you've listed, I will still keep believing that it CAN happen.
(My personal bias here).
A lot of seemingly impossible things have happened in India lately.
I agree, we've begun doing great things lately. Still a long way to go though so I'll respectfully disagree and urge you to get blackpilled and then figure out what should be done next.
I can tell you one thing - it certainly won't happen if we keep waiting for another person to do it.
By 2030 India and US relation would be the same as US UK post ww2, as mentioned by geopolitics expert Ankit Shah. The events he has predicted seems to be coming true so far. With endless printing money of US in covid and due to dedollarization, financial reset is coming in west hence so many layoffs. Regarding China people say it's ageing country. Birth rates are down, not sure though in how many years effect will be seen. But I believe there a 3rd war coming in 2029-30 period
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