Can India be the Next Biggest Story? Opportunities and Structural Challenges

The objective of this chapter is to address the question of whether India can be the next big economic power after China. In the past two decades, the world has witnessed a momentum in global geopolitical transitions, largely due to the emergence of China as an economic superpower and the increasing dependence of emerging economies across Asia, Africa and Latin America on it. This has brought with it strategic complications and the vulnerability of these economies to the dilemma of security versus economic interests. However, amid concerns about China’s slow-down, aging population, stumbling property market, excessive corporate leverage, reform fatigue and strained trade relations with the US and its allies, the emergence of India as a potential new economic and political superpower is receiving increasing attention as the next big story, which is believed to ensure greater balance among world powers. This chapter revisits the growth projections, opportunities and structural challenges facing India. It shows how structural weaknesses pose serious challenges to sustained growth acceleration in the country. To leverage its strengths, India must adopt structural policies to push strong and sustained investment growth across a variety of economic sectors and translate investments into effective and sustained growth by upgrading human capital.