Top India Analysts Dispel "India's Size Illusion"

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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Comment by Riaz Haq on April 24, 2022 at 11:25am

China-India population debate comes down to quantity vs quality after social media sparks storm

https://www.scmp.com/economy/economic-indicators/article/3171867/ch...

China’s overall population only increased by less than half a million last year to 1.4126 billion, according to official government data
A widely shared social media claimed India’s population had hit 1.415 billion earlier this month, although the figure was widely criticised as it lacked official authority


Mainland China’s overall population increased to 1.4126 billion in 2021, but the national growth rate hit a record low of just 0.34 per thousand. Photo; AFP
Mainland China’s overall population increased to 1.4126 billion in 2021, but the national growth rate hit a record low of just 0.34 per thousand. Photo; AFP
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.

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China-India population debate comes down to quantity vs quality after social media sparks storm


https://noovell.com/en/similar/84850664

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China has “great potential” for a higher fertility rate if the standard of living and access to public services are improved, according to a leading demographer.

https://www.thestar.com.my/aseanplus/aseanplus-news/2022/04/02/chin...

In an article in The Beijing News on Wednesday, Cai Fang, a demographic economist with the Chinese Academy of Social Sciences, also said there was an “urgent need” to improve basic public services and make them available to everyone to address the extremely low fertility rate.

While the trend of lower fertility rates has been seen across Asia – linked to factors such as urbanisation and female empowerment – the decline has been steep in China in recent years, partly due to the cost and pressures of raising children.

According to the latest official data, there were just over seven babies born per 100 people in mainland China in 2021 – a record low. The fertility rate, or the number of children per woman, is now 1.3. That is below the level in Japan, a rapidly ageing population like China, and below the replacement rate of 2.1.

Comment by Riaz Haq on April 24, 2022 at 11:26am

China is facing a major demographic challenge as the working-age population shrinks, with over-60s expected to make up a third of the population by 2050, and there are concerns that the ageing society and declining births could threaten future economic growth.

https://www.thestar.com.my/aseanplus/aseanplus-news/2022/04/02/chin...

To tackle the problem, Beijing abandoned its decades-long one-child policy in 2015, allowing couples to have two children, then expanded that to three children last year. But many young people say they are deterred by the high costs of raising children, and a lack of government support.

There have been moves to change this, including with more parental leave in some places and the introduction in January of a monthly tax deduction of 1,000 yuan (US$157) per child under three to help ease the financial burden.


However, economists and demographers say the government needs to do more.

According to Cai, with the CASS, Beijing could use the UNDP’s Human Development Index (HDI) as a measure to help assess and improve public services in China.

HDI is a measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable, and having a decent standard of living in terms of gross domestic product per capita.

China’s HDI value for 2019 was 0.761 – ranking it at 85 out of 189 countries and territories. Norway topped the list with a value of 0.957, followed by Ireland and Switzerland. Most developed countries have an HDI score of 0.8 or above, and have stable governments, widespread education and healthcare, high life expectancies, and growing, powerful economies.

Cai said the fertility rate would improve with a higher HDI score. “The fertility rate will hit the bottom and rebound when the HDI at least reaches the range between 0.80 and 0.85,” he wrote.

‘Are women just machines?’ Chinese web users left cold by birth rate solutions
China, the world’s second-largest economy, was ranked 79th for GDP per capita as of 2017. Some 600 million people in the country live on a monthly income of 1,000 yuan or less, Premier Li Keqiang has said. That means more than 40 per cent of the 1.4 billion population live on less than US$5 a day, and for many there is no pension or medical insurance.

In addition to improving public services and living standards, Cai said “special attention should be given to gender equality”.

Gender discrimination remains pervasive in China and has discouraged some women from getting married. Many women in recent years have also raised concerns about issues such as domestic violence, the unequal distribution of household work and discrimination against working mothers.

Around 7.63 million marriages were registered in 2021, the lowest number since 1986 when records began, according to the Ministry of Civil Affairs, extending a near decade-long decline.

Huang Wenzheng, a demographer and senior fellow at the Centre for China and Globalisation in Beijing, was not optimistic that the change to the birth policy and more support measures would be enough to encourage people to have more children.

“So far the effects of the policy have been too limited to reverse the trend of a declining fertility rate,” he said.

Comment by Riaz Haq on May 23, 2022 at 8:32am

Autonomous Hindutva could devour both India and the Bharatiya Janata Party
In a formally secular India, religion indeed seems to have become the opium of the people, a mass distraction from the transformative social agenda that the country needs

Last Updated at May 23, 2022 09:46 IST


Bharat Bhushan

https://www.business-standard.com/article/opinion/autonomous-hindtu...

With the rapid radicalisation of sections of Hindu society, the Hindutva project has become dangerously autonomous. It is no longer possible to see it only as an electoral strategy of the Bharatiya Janata Party (BJP). Today one does not need to even presume the direct hand of the BJP or the Rashtriya Swayamsevak Sangh behind Hindutva’s every move.

Its exponential social growth may have placed it beyond their control. In a formally secular India, religion indeed seems to have become the opium of the people. When Marx described religion as “the sigh of the oppressed ...

Comment by Riaz Haq on May 24, 2022 at 6:42pm

#California’s (pop 40 million) #gdp of $3.4 trillion as of 2021 is larger than #India’s (1.4 billion pop).California's #SiliconValley is home to world's most valuable #technology companies, including #Apple, #Google and #Facebook. CA is home to over 10% of Fortune 1000 companies

Comment by Riaz Haq on October 20, 2022 at 5:23pm

Frank O'Donnell
@frank11285
“Modi laid the foundation stone for the Deesa airfield in Gujarat which will be a forward Air Force base.”

https://twitter.com/frank11285/status/1583224834896515073?s=20&...

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https://www.thehindu.com/news/national/new-airbase-coming-up-in-guj...


PM launches ‘Mission DefSpace’, an ambitious effort to develop innovative solutions for the three Services in the space domain through Indian industry and start-ups
In an ambitious effort to develop innovative solutions for the three Services in the space domain through the Indian industry and start-ups, Prime Minister Narendra Modi on Wednesday launched the ‘Mission DefSpace’ at the ongoing DefExpo. He also released the fourth defence indigenisation list which bars import of 101 items after certain timelines.

“Space technology is an example of what security will mean for any strong nation in the future. Various challenges in this area have been reviewed and identified by the three Services. We have to work fast to solve them,” Mr. Modi said. Under Mission Def-Space, 75 challenges are being opened to get innovative solutions, based on the defence requirements in the space domain, the Defence Ministry said.

Stating that space technology is shaping new definitions of India’s generous space diplomacy, giving rise to new possibilities, the Prime Minister stated, “Many African countries and many other small countries are benefiting from this.”

Real-time access to data
There are more than 60 developing countries with whom India is sharing its space science. “The South Asia satellite is an effective example of this. By next year, 10 Association of South East Asian Nations (ASEAN) countries will also get real-time access to India’s satellite data. Even developed countries like Europe and America are using our satellite data,“ he stated.

Explaining the significance, Lt. Gen. A.K. Bhatt (retd.), Director General of the Indian Space Association (ISpA), said this was the first time an opportunity was being given to the private industry in the defence space sector. “Defence space challenges, which have been worked with the Services, Ministry of Defence (MoD), along with private industry and the ISpA, are primarily aimed at making a range of defence applications to enhance the capability of the three Services,” he stated.

One senior official explained that the effort is not meant to develop offensive capabilities in space but to build technology enablers for the Services.

As part of efforts to boost the domestic defence industry and promote defence exports, the Defence Ministry had earlier promulgated first, second and third Positive Indigenisation Lists, comprising 310 items on August 21, 2020, May 31, 2021 and April 7, 2022 respectively. The items on the lists cannot be imported by the Services and should be sourced from within the country.

The fourth list has been prepared by the MoD after several rounds of consultations with all stakeholders, including the industry, the Ministry said in a statement. “It lays special focus on equipment/systems, which are being developed and likely to translate into firm orders in the next five to 10 years,”

Like the first three lists, import substitution of ammunition which is a recurring requirement has been given special focus, the Ministry stated.

The items listed in the fourth list will provide ample visibility and opportunity to the domestic defence industry for understanding the trend and futuristic needs of the armed forces and create requisite research and development and manufacturing capacity within the country. the Ministry added.

Comment by Riaz Haq on January 7, 2023 at 10:29am

Sadanand Dhume
@dhume
Contrary to all the hype, India’s market for consumer goods remains very small. The Chinese buy about 8X more iPhones and nearly 100X more BMWs than Indians. Starbucks has 20X as many outlets in China as in India. [My take] v
@WSJopinion

https://www.wsj.com/articles/india-middle-class-free-trade-modi-tar...

https://twitter.com/dhume/status/1611155691540217858?s=20&t=FIh...


Sadanand Dhume
@dhume
This column has set off a mini firestorm here, so let me quickly respond to some of the objections. First, people point out that obviously China is a larger market than India. After all, it’s a larger economy. Chinese GDP in 2021: $17.73T. Indian GDP: $3.18T. 1/n

https://twitter.com/dhume/status/1611369521146732553?s=20&t=FIh...

Sadanand Dhume
@dhume
But this doesn’t refute my central point—that contrary to popular belief India’s market is small by global standards. We should ask how China pulled so far ahead. In 1990 Chinese GDP ($360b) was similar to Indian GDP ($321b). Now China’s economy is 5.6X larger than India’s. 2/n


Sadanand Dhume
@dhume
Over the past decade, the gap between China and India has not shrunk. It has grown. In 2012, the Chinese economy was 4.7X larger than India’s. 3/n

Sadanand Dhume
@dhume
Moreover, as I show in my piece, mere GDP figures are misleading. For many consumer goods, the gap between the Chinese market and the Indian market is LARGER than the gap between Chinese and Indian GDP. 4/n


Sadanand Dhume
@dhume
Now to the second major objection: “Don’t talk about Starbucks, iPhones and Netflix subscriptions. These are luxury goods.” My response: The fact that they are luxury goods in India proves my point. If Indians had more disposable income they would not be seen as luxury goods. 5/n


Sadanand Dhume
@dhume
Or take cars, a middle class good in much of the world. In 2021, the Chinese bought 26.3m cars. Indians bought 3.7m cars. The Chairman of Maruti Suzuki recently pointed out that it could take 40 years for the Indian car market to catch up with China’s. 6/n

India will take 40 yrs to draw level with China's car penetration: Bhargava
As a result, the small car market has been shrinking as two-wheeler customers shelve or delay plans to upgrade to a four-wheeled drive

https://www.business-standard.com/article/companies/india-to-take-1...

Comment by Riaz Haq on January 13, 2023 at 6:44pm

Shahzad Chaudhry
@shazchy09
Here is a bouquet of good wishes for our Indian colleagues. It is difficult to write here in Pakistan on India in these terms, but I write for the good of Pakistan. Hope my readers will agree. https://tribune.com.pk/story/2395510/on-india-1

https://twitter.com/shazchy09/status/1613759425394929666?s=20&t...

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If I were Henry Kissinger, I would write a treatise ‘On India’. Such has been the monumental change in India’s fortunes as a State and a player principally in Asia and broadly on the global stage. Modi may be a despised name in Pakistan, but he has done something to brand India which none before him was able to manage. Importantly, India does what it feels and to the extent she needs. And it all stays kosher. It is an ally of the US; a rub Pakistanis go to town with, complaining relentlessly about the US as its closet patron. We are delusionary and deceptive in assessing our standing and employ double-speak as an art, vilifying the US as a popular pastime while whingeing when it accosts India. Russia is under American sanctions, and none can trade freely with Russia except India which buys Russian oil on preferred terms and then re-export it to help an old patron earn dollars the indirect way. Two opposing military superpowers of the world claim India to be its ally. If this isn’t diplomatic coup, what is?

It all comes from one word — relevance. India is relevant to the world, not only in its size and girth but by its footprint and what matters to the world. Consider. It has the fifth largest economy in the world, ahead of the UK. It is aimed to be the third largest economy in the world by 2037. It is fourth in FE Reserves with over 600 billion USDs — Pakistan currently holds 4.5 only. Its growth rate in GDP matches the best performing economies over the last three decades after China. She is projected to stay on that path. India has world’s second largest army and the third largest military. It may not be the strongest corresponding to the numbers, but it is on path to rapidly increasing its capacity and capability. The global list of billionaires has 140 Indians of which four are included in the top 100.

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It is time to recalibrate our policy towards India and be bold enough to create a tri-nation consensus, along with China, focusing on Asia to be the spur for wider economic growth and benefit. That alone will turn geoeconomics into a strategy. Breaking away from convention and boldness in conception can address this newer paradigm. Or we may be reduced to the footnote of history.

Comment by Riaz Haq on January 13, 2023 at 6:44pm

Yes, #India is a very important country, especially for #Pakistan as its huge neighbor. But it takes two to tango. I see little hope for better ties while #Islamophobic #Modi rules India. Please read this: Top India Analysts Dispel "India's Size Illusion"

https://www.riazhaq.com/2022/03/top-india-analysts-dispel-indias-si...

Comment by Riaz Haq on January 16, 2023 at 10:44am

Imran Khan's Party Uses Old PM Modi Clip To Target Pak PM.


https://www.ndtv.com/world-news/pm-narendra-modi-imran-khan-pakista...

An old video of a speech by Prime Minister Narendra Modi is trending across the border. Leaders of Imran Khan's party, the Pakistan Tehreek-e-Insaaf, are sharing a clip of PM Modi to slam the Shehbaz Sharif government over Pakistan's financial crisis.
The video shows PM Modi's speech in Rajasthan's Barmer during his campaign for the 2019 general election. "We destroyed Pakistan's arrogance, forced them to go around the globe with a begging bowl," the Prime Minister says.

He also refers to Pakistan's threats of a nuclear attack and says: "We have stopped fearing Pakistan's threats. If they have nuclear weapons, ours are hardly kept for Diwali."

Comment by Riaz Haq on February 24, 2023 at 6:37pm

The Wire
@thewire_in

After S. Jaishankar said that India cannot pick a fight with China because the latter has a bigger economy, military veterans have accused the Narendra Modi government of having a "defeatist attitude" and "bowing down to a bully".

https://thewire.in/security/veterans-criticise-jaishankar-china


New Delhi: After external affairs minister S. Jaishankar said that India cannot pick a fight with China because the latter has a bigger economy, military veterans have accused the Narendra Modi government of having a “defeatist attitude” and “bowing down to a bully”.

In a podcast with ANI editor-in-chief Smita Prakash on Wednesday, Jaishankar said: “Look, they (China) are the bigger economy. What am I going to do? As a smaller economy, I am going to pick up a fight with the bigger economy? It is not a question of being reactionary, it’s a question of common sense….”

He added that India and China have an agreement not to bring large number of troops to the border, and asked if India should violate that agreement.

Former Navy chief Arun Prakash, a veteran of the 1971 war, tweeted: “If relative size of economies is seen as arbiter of int’l relations, how come nations like Cuba, N Korea & Iran thumb their noses at the USA or Vietnam at China? India, as a democracy, nuclear weapon state & significant economic & mil power must stand firm against hegemony.”



Major General Shail Jha (retired) tweeted: “Mr Jaishankar should know that its not India but China which is picking the fight.”



The veteran added: “Economy or no economy, if we bow down to a bully, we are abandoning our self-respect. Is it acceptable? What a shame. And the guy is being hailed as the greatest FM. It’s cowardice.”



Speaking to The Telegraph, a former lieutenant general said Jaishankar’s statement was “shocking” and was reminiscent of “unconditional surrender”.

“What happened to the so-called muscular nationalism that this government projects in election speeches? Modi’s self-declared muscular nationalism has now capitulated to Chinese aggression and bullying,” the veteran said.

Speaking about Chinese intrusions across the Line of Actual Control (LAC), the veteran told the newspaper that instead of “asking the Chinese troops to retreat”, the “New India under Modiji agreed to create buffer zones within Indian territories in eastern Ladakh as part of the disengagement agreement, thus ceding further territory to China



A retired colonel said Jaishankar’s “defeatist statement” spoke volumes about Modi’s China policy. “Where is Mr 56-inch Modi’s muscular nationalism when it comes to China?” the former colonel asked.

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