Edward Luce In Spite Of The Gods Indias Rise To A Viksit Bharat

TITLE: Edward Luce - “In Spite of the Gods: India’s Rise to a Viksit Bharat” | 6th GW India Conference CHANNEL: Institute for International Economic Policy (IIEP) DATE: 2026-04-22 ---TRANSCRIPT--- So it’s really a pleasure to have I don’t think Ed needs an introduction to this most of this audience. He’s the national editor of the Financial Times. I’m sure most of you read his columns. I do, avidly. Uh, but I got to first hear of Ed in, I think somewhere around 2007, 8. Um, I had been mostly out of India for a long time. I went home on a holiday. I went to a bookshop that some of you probably know called Bahrisons in the Khan market in New Delhi. And I found this little treasure. It’s called In Spite, the title itself was so intriguing, you know, I’m not a very religious person myself, so I said, wow, a book says In Spite of the Gods. The strange rise of modern India. So I, I thought first I’d ask Ed, um, I, there’s so many things I want to ask him, but I thought first Ed, I’d just ask you, thank you so much for being here and, uh, spending this time with us. I know you have a train to catch later, but the title itself, I said the first part of course is very intriguing, in spite of the gods. I mean, the, the in and the spite are separate words that, uh, could be together. Uh, and then, and then the, and then the strange rise of modern India, I thought just let me, get us started with how did that come about, you know, and what was in your mind at that time in India?

Uh, well, first of all, Ajay, thank, thanks for inviting me. Um, it’s, it’s always a pleasure to, to see my Indian friends. A little bit, I have to give a health, health warning. It’s a little bit, um, intimidating. I know, are less up to date on India than any single person in this room. And I notice that Sadanand and Ashutosh are sitting there in the front row staring at me. Obvious attempt to intimidate. Um, but, uh, the, the title of the book, and thank you for bringing up, you know, my first book and the one I most loved doing, actually. Um, which was now 20, 20 years ago. Um, so, uh, the American publisher, this is the non-American, so British-Indian, um, uh, wanted, wanted to, got rid of the word strange in terms of the rise, so it just became The Rise of Modern India. And one of them suggested, only semi-facetiously, it should be, instead of In Spite of the Gods, it should be Because of God: The Rise of Modern India. I said, that’s not really what I’m aiming at here. Um, so we stuck with In Spite of the Gods. And I think it was an attempt, on my part, to, um, play on, um, well, the gods, the gods are about sort of arbitrary, you know, both in ancient Indian culture and in Greek culture and, and in, in sort of pre-monotheistic cultures, the gods are about arbitrary throws of dice. Um, and, you know, India had had some pretty arbitrary negative throws of dice, not least, you know, from my compatriots. Um, and, um, also there was an orientalism, you know. Um, there was a sort of worship of, um, um, not a worship, a sort of fascination with, um, you know, the snake-charming side of India, you know, and the Beatles sort of romance with it, and the whole sort of backpacker year-off, um, approach to India as being a non-materialist, purely spiritualist culture. And I just wanted to knock that on the head. Um, and so it’s not, it’s not a, it’s not a reference to, um, polytheism or Hinduism or anything like that. There’s no, there’s no implied pejorative meaning there.

Well, Ed, so there’s so many fascinating parts to the book which I’ll come to, but you know what intrigued me most was the last chapter where you, it’s what we call the CIA, you know, the China, India, America. And Ed, in that time, I probably, you wrote the book when, probably in 2005 or 4, 5, you already in a very prescient manner said the 21st century will be an interplay between the C, I, and A. That’s China, India, and America. And I mean that seems possible now, but when you wrote that book, that was an amazing kind of foresight if you like. I mean what was there in India at that time that, just the size, or was it something else that brought that about?

Um, so the actual CIA, I mean the Central Intelligence Agency, um, had been describing for I don’t know two or three years, and in their NIC, the National Intelligence Council, or the quadrennial intelligence reports, India as the global swing state of the 21st century. Right. Um, and it was quite clear at that point, I mean, what the CIA was, it was embedded in a broader bipartisan consensus in this town that, um, India must, will never become a formal treaty ally because that’s not what India wants, but it will become a natural partner, friend, ally, um, and we must do everything we can to facilitate that. And Bob Blackwill was the US Ambassador, um, for Bush at that point, and I got to know him quite well. And, you know, the strategic sort of thinking about the 123 Agreement and bringing India in from the nuclear, um, periphery or cold, um, was based on, we want this swing state to swing to us. So much as I would love to claim prescience, um, you know, this was, this was a, about the emerging relationship, really, between, and friendship between America and India. And the conception which held across administrations, Democratic, Republican, Trump’s first administration, the Biden administration, um, that, you know, India is the natural bulwark to a rising, um, and challenging hegemon, China. And, you know, that held until last April. And I’m not sure the degree to which people from Jaishankar downwards and sideways or upwards are now confident that in this Washington that continues to, to hold. But I still hold the view that India is, and I think most people in here, hold the view that India is not going to catch up with China, um, in the foreseeable decades. Um, but it is outgrowing China, and China’s growth is almost certainly exaggerated. India can, without doing much, can get 6, 7, 8% a year. China in reality is about 3%. Its population is falling. Um, and it’s, and that’s going to compound itself, so it’s going to drop quite sharply. Uh, India’s continues to rise. So it’s not just the largest, uh, you know, country, population-wise, but economically it will become the third largest sometime in the next sort of 5, 6 years. Um, very distant third, you know, compared to China and the United States, but gradually, gradually sort of, um, gaining ground on, on both of those. And so it’s inevitable. There’s no other country that can possibly, um, fulfill that role. By, by 2050, India will be the second largest economy in the world, if things go well. Um, but even if it isn’t, it will be an absolutely key geopolitical swing state.

Well, you know, some, some call it swing state, some call it a hinge state, but, but your, one of the people that you thank in this book, you probably knew him well at that time, Sanjaya Baru, has just written an article in the Asian Age which basically says that all the suspicions that Indians had of the United States in the previous century, which was beginning to change since George Bush and Manmohan Singh had the nuclear deal and then came Obama and then Trump 1 and then Biden, are all up in the air again in, in, back in, back in India. What do you think, uh, that the natural pull between India and America will persist or will there be question marks that will persist even after a Trump administration?

So this is, if you think of, of what surprised me and I’m sure most people in this room about the Trump administration, um, this time round. Uh, first and foremost is the belligerence. Um, is just the sort of trigger-happiness um, of Trump. The ease with which he’s sort of sloughed off the America First not getting entangled, not getting involved in forever wars, particularly Middle Eastern ones, the ease with which he’s, that’s been, that’s been a huge surprise to many people, JD Vance I’d put first on that list. Um, it’s also, the other surprise is the spirit of, not quite obeisance, but certainly a lot of flattery towards China. Not a negative word about China, and there’s been negative words about everybody else. I mean maybe recently not Pakistan either. Um, but, uh, friends, you know, get harsh words. Um, non-friends for the most part, get harsh words. Even Russia sometimes, I mean he’s flipped once or twice, sort of, there’s a slight bipolarity in mood swings towards Putin. China, not once. Um, and, um, that, that surprised me because the consensus, which we can debate the value of, but the consensus that China is the emerging sort of threat and, um, we have this is the sort of surpassing transcending geopolitical challenge of our, of our era as Americans, um, crystallized in Trump’s first term. And in fact it was Trump who helped in his haphazard way to form that consensus. So, um, I guess then, when he started, from Liberation Day, pretty much exactly a year ago, the trade war period, which began April, whatever it was, April 7th, and then ended with the Supreme Court, um, ruling a few weeks ago. But when he started that, he was carrying on from his first term with China, because China went right up to 145%. And then the markets gave him a middle finger. Um, not just the stock markets, but the bond yield. Um, the fact that this is going to push mortgage rates up, that this is like bringing into question um, the full faith and credit of the United States. That, that was the first taco moment, Trump always chickens out. And in fact it was a colleague of mine, Robert Armstrong, who coined that acronym, um, TACO. And China understood the TACO better than anybody and continues to. And I would argue that the biggest geopolitical event of 2025 was not some of the obvious things that you can think of, all the regional stuff like the India-Pakistan conflict, um, or the 12-day bombing of Iran. Um, it was the G20 meeting in South Korea in late October where Trump climbed down in his trade war with China. Um, he essentially submitted, um, called a truce, but it was a, it was a de facto a sort of admission, um, a polite surrender, after China had exploited um, its rare earth stranglehold, that chokehold. Um, and ever since, um, he’s been ultra respectful, respectful towards China. And is going to treat this summit, which he was asking for from day one, uh, China wasn’t going to give it whilst there was a trade war on. But he’s going to treat this summit as the most important event and the first of three summits between him and Xi Jinping in 2026. Um, if you’re India, if you’re Jaishankar or if you’re Modi and you’re watching, you’re watching Trump’s body language and actual language towards China and you think of well what does this Washington bipartisan consensus mean, when you’ve got a president who is um going pretty much diametrically the other direction. Um, and I wish I had the answer. Um, but there’s enough continuity here in Trump’s um respect for and solicitousness towards China for, for me to think this is, this is a permanent shift. And the final point I would make, and you know, unfortunately India isn’t big enough for this to be a positive point. But is, he is a classic bully. Um, and bullies pick on weaker people, and China he is given it its due, he is not treating China as weaker.

So, so last night actually we had a, uh, dinner where you might have seen this book, it’s called Friends With Benefits, Seema Sirohi. Yeah. And I, we were jokingly telling her, you may retitle it Friends Without Benefits, which is what it’s become now. So, I want to ask you two more questions and then if you’re okay, a few from the audience. Absolutely. Specially, you know, I mean, I’m not looking at the two gentlemen in front of you, but, um, but, you know, one of the themes we’ve had of our conference and we’ve had a great session this morning also and the keynote also stressed on it, is on deregulation of the Indian economy. And you have a fantastic chapter in this book, you, I mean, you call it Burra Sahibs, but it’s a lot about bureaucracy and regulations and various aspects of Indian life which citizens and businesses have to go through, you know, and are probably hugely constrained by, right? So that, and then there are some retired Burra Sahibs in this room as well.

Again, it’s not a pejorative term.

I know. I know. That’s a kind of a… Yeah. So, do you want to say, so now there’s a big push by the Modi government supposedly to deregulate, and I remember that Mr., Dr. Manmohan Singh also had something called the Second Administrative Reforms Commission which had 1600 recommendations of which 1200 were actually implemented. But the most critical ones were obviously not. And this morning we heard that now this, this round they’ve had 880 recommendations of which 600 have been already implemented. So what, just hark back to your time in India and what you see, what you see about India. Is it possible that India could actually ever really deregulate?

I was in India recently, for the first time in a while I went to the Jaipur um festival in January. Uh, and then I was planning to spend a week in Delhi, um, but any, any amount of, whatever time of the year, whatever time of the night you choose to take a break from your job in Washington DC nowadays is the wrong time. Um, so I was sort of yanked back, asked to sort of rush back and didn’t therefore. But it’s always a sort of something that strikes me and other um friends of and frequent visitors to India. You know, the, the Modi emphasis on infrastructure has been very effective. Um, you know, and I think in 2014 when he was first elected um, and there were sort of lots of projections coming from Western economic reformers onto India, the rather um trite and I think naive expectation was he would be a Reaganite Thatcherite kind of deregulator, rather than a sort of more Chinese style grand project um figure. Um, I think, you know, the grand project stuff has been by and large going pretty reasonably, reasonably well. Um, although there’s a lot, you know, there’s a lot more to do, but um he’s now going to have to move into the Reaganite Thatcherite um era. That it is, and the trade war, which is I suppose in suspension now since the Supreme Court ruling, but the trade war ought to be a spur um I think to extract the growth from the internal remaining internal barriers and and frictions and sort of um the the the babu raj that still, that’s still there in many in many aspects of economic life. It’s been a decade since the goods and services tax was passed. A very essential thing. It was being debated when I was based in India. Um you know, it took another decade after I left India for it to be passed and now a decade on it’s very incomplete. There are all kinds of sort of offsets and exemptions and loopholes and it’s not the clean sort of easily workable paperwork abolishing GST that it could be. Um, so, you know, maybe that’s one of the, you know, in terms of people checking boxes for administrative reform, well this is one of the biggest possible um in terms of tax reform. Maybe that box has been checked by somebody, but it shouldn’t have been, or at least only half checked. The, the good news is um you know it doesn’t matter what the USTR or Trump or or indeed, you know, other trading partners do or say, internal growth is still underexploited. And um you know, Modi has the power to push this through. Um, I’m puzzled a little bit, and here, you know, my not having lived in India for quite a long time now would begin to show, why he’s not shown a little bit more alacrity um on something like that. But that’s just as an example. There should be a lot more foreign direct investment in India than there is. Um, and and this is this is all related to that.

So one last question from me and then I’ll open it up. So, you know, of course India faces many external challenges, there are borders are all, we have neighbors that challenge us all the time, but, how do you see this, you said India would be the second largest economy, but there’s so many internal challenges as well. And two that are now looming are one this North-South uh, kind of issue where the South has done well so demographically they’ve got much lower growth rates, and then we have to re you know rewrite the numbers in the seats in the parliament etc. There are ways around that which people have suggested, but that’s a big challenge right? And then there’s the religious divisions. Um, I mean, I I don’t, I don’t want to put you on a spot or anything, but just you know I always find that people outside can see things more clearly than people inside, uh, about what’s happening. And so any thoughts on, on either of these two, uh becoming so difficult to manage that they might lead to big constraints on this path that India should naturally get to?

Um, so I, I mean I know we all rather simplistically sort of bunch backsliding democracies and um, full democracy, I mean in these sort of categorizations that various think tanks do around the world. And it happens that, you know, Hungary completely different, tiny country, you know, compared to India. Um, Hungary is in the same category as backsliding or illiberal democracy as India is. I actually think, you know, about the contrast. The, there’s always been corruption in the Indian system. Much less from the top, um, in in terms of the personal enrichment of the Prime Minister and his friends and the people who are serving him, than you saw in Hungary and in other places including this town. So, you know, I don’t, I don’t wish to sort of sweepingly, and I I think that um, I’ve always believed that India’s one of its most inherent and attractive strengths is its pluralism. Um, and, and generally the tolerance that comes with that pluralism. The comfort Indian Indians have with diversity. With different languages, with different faiths, with different sort of situations and melees, the ability to navigate chaos, um, and you know somehow emerge unscathed from anarchy, you know this is this is an extraordinary and very sort of unique quality to India as you know as a country, as a civilization arguably. So it’s, it’s something that shouldn’t be and of course it can produce inefficiency. Um, so it shouldn’t be sort of worshipped as an untouchable sort of quality of India. India needs to streamline itself, and it needs to be more more efficient about taking certain kinds of decisions. But you cannot have I don’t think in the long term a society that plural um holding together um if it isn’t at least in spirit if not the letter secular in its approach, in its governing system. And so I do worry, I do worry about what um about some of the backsliding that we’ve seen under under the NDA in the in the last 12 years. On that and continue to see. Um, I don’t think that, you know, economics is not a morality play. India is not going to be penalized any growth for for being less secular. Or for, you know, making certain minorities less comfortable about their status in society. Um, and therefore there won’t there won’t be any sort of pressing economic need um I don’t think unless there’s some really unforeseen mega breakdown or communal sort of violence on a on an unheard of scale, I don’t think there’s I don’t think the markets will prod India back into a more Nehruvian direction. This is a this is a political question that India has to to resolve. Modi doesn’t have an obvious successor. I guess you know people like him don’t want obvious successors. Um, uh, and he’s getting older. I mean I think um what is he, 75, 76? I mean he’s a a considerably fitter 75, 76 year old than recent septuagenarian leaders I can think of. Um, so I mean he’s not necessarily, you know, um, going to, I mean he probably wants to win the next election and carry on and he’ll probably be able to. But at a certain point this will start rotting. And the BJP will be in danger of sort of of of internal strife and competition for and potential splits. Um, and if you have if you have a more effective opposition plan to unify, and that is a lesson from Hungary by the way, that’s applicable universally, that you put aside your differences and you have one goal, and that is the ejection of this um this dominant party. I don’t know whether that’s Rahul Gandhi, but um if you if you have the lessons of 2024, the almost lessons you know, where there could have been a much sort of, Nitish Kumar shouldn’t have sort of left the, um the coalition, they should have been a lot more disciplined and coherent and they might have done even better in 2024. I hope those lessons are being learned and will be applied. Um, and I do think that Hungary, the Hungary one, even though it, I can’t stress enough, it’s a country of less than 10 million people in Europe. Um, it is an extremely interesting moment on two two counts. One, corruption. That’s why, that’s why he lost. Two, you know, and corruption is a way it’s not it’s very different to talking abstractly about the rule of law and procedures of democracy, which is an elite topic. Um, corruption is not. Particularly when growth is slowed. Um, and but the second one I think even more important is sort of the the what I call the church of liberal um teleology um in the West that believed that everybody is on this escalator and that the the arc of justice bends towards the arc of history bends towards justice etc. When it’s when it got these depressing blows and reversals, it inverted itself and and adopted a negative teleology, which is oh the global right, populist right’s on the march, it’s unstoppable. It’s not. Like nothing is written in the stars, everything’s up for grabs. It’s to do with how well you do it, how much you study it, how much time you put into it. And so I think that’s a sort of deeper, I think very positive shock that we got from last Sunday that goes way beyond Hungary.

Interesting. I’m sure that people dying to ask questions, would you take a few questions?

Of course. Of course.

Yes sir. Get a mic, please. Can you wait for the mic and just say your name because they’re going to record all this, yeah.

Um, hello, my name is Satvik Pendyala. Um, this past December um we saw from China’s NDRC a few publications talking about a competition for second place, that, you know, once China really starts growing that the second place really becomes the place where the US and India have to have to compete in scale. And the US is far ahead of India in this case. Um, and a couple months ago Christopher Landau went to India and said that, you know, that the US won’t make the mistake that it did with China and won’t let, doesn’t want India to grow as much, you know, and there’s still a lot of room for India, but is there a room, is there a path to a Viksit Bharat if the US does not cooperate? If it does not help facilitate this?

It’s a very good question. Um, and I think about a fifth of India’s exports go to America and, you know, so it’s important, but not, um, it’s not like Canada, which is three quarters. Um, you do have a more dive, I don’t know whether you is appropriate whether you’re American or Indian, but, um, uh, somebody else, and I’m trying to remember who it was, said that globalization doesn’t stop until Eurasia says it stops. So America might be opting out of the sort of the rules and the trade deals and investment treaties and so forth. Others are accelerating doing these things. As a result of, um, post-Liberation Day seismic shocks that Trump has been generating. Um, including with India. Um, there was a, you know, a really quick UK-India trade deal very early into the Trump administration, a few weeks after he was inaugurated, no coincidence the timing. EU and India are talking, um, ASEAN, I mean in terms of Europeans Mercosur, sort of beyond the Eurasian, the World Island. Um, globalization is deepening. Um, uh, or at least, or at least that facet of this is accelerating as a as a sort of counter reaction to this shock coming out of Washington. Um, and I think India is participating more enthusiastically, it’s always been a foot-dragger on trade. And it is a large country, it’s got less trade dependency than Singapore or, um, you know, the Gulf states. But, but it realizes trade and particularly foreign direct investment is going to be a key portion of Indian growth in the years ahead. And so this is another thing, I think, I mean we’re seeing some signs of the Modi government doing, stepping up, but it could step up even more. Um, and I’m totally forgetting what your question was. It was a really good subject so I’ve just been sort of going off on my own.

Is there a way for a Viksit Bharat without the US?

Oh yes, it can, yeah. Sorry, that’s, I was answering the question, yeah.

Over here. Yes sir.

So, my name is Abhishek and I am a lawyer. And on the topic, like, In Spite of Gods, I was just curiously, you know, like domain specialization improves resource optimization, right? And in India, we have specialized gods for different roles. So maybe, like, your second book can be “Along With the Gods” after India meets those growth targets that you mentioned. Any thoughts on that? Thank you.

“Along With the Gods”. Um, I, I like, I like that idea. I mean, I would need to be, um, which would be a delight, I would need to be living in India again to feel like remotely qualified to, um, to start writing about India again. Um, and, and that moment will come, but I will lodge the suggestion in my head, thank you.

Satadan?

Thanks so much, and I want to quickly add to anyone watching online to Ajay’s plug of Ed’s wonderful, wonderful book, which holds up after so many years. And I wanted to bring you back to something that you started the conversation you started with with Ajay. Um, on the one hand, you know, you pointed to Trump being obviously intimidated to a certain extent by Xi Jinping and China. Very obviously taking great pains to play nice, not saying a single negative word, and so on. Um, but on the other hand, you’ve been in Washington for a long time. There’s a very large foreign policy infrastructure in this town. You have the think tanks, you have universities, you have Hill staffers, you have the permanent bureaucracy, and so on. And, among this vast group, the fact that the US would be in great power competition with China has been conventional wisdom for for quite a while. So, my question is, do you think that Trump’s predilections or capriciousness would be enough to overcome this vast infrastructure of foreign policy and so on that seems to at least and has for a while now cut in the opposite direction on China?

It’s a, it’s a very important question. I mean the, um, the summit, the delayed summit is now going to be mid May I think, and it was going to be the end of March, assuming that the Iran, you know, the epic fury is over by then because I don’t think he, I don’t think he will, I think he’ll postpone again if, if this situation is ongoing. Um, but I, I’ve been talking to the, you know, I talk off the record to some of the Chinese um, um officials in the government and um, so as do my colleagues. Uh, and they’re kind of at a loss because, you know, they like, like most nations, but maybe the Chinese even more so, they like to plan these summits ahead, in advance. Um, and have some deliverables lined up and sort of and that involves working groups sort of thrashing out communiques and, and, uh, you know, um, uh, memoranda of agreement etc. Uh, none of that is possible. And it’s not that, you know, um, Trump’s team, it’s not that Rubio’s State Department or his National Security Council or Bessent’s Treasury or Lutnick’s Commerce Department, um, wouldn’t be happy to talk to the Chinese, is that they have no idea what Trump wants out of this summit. Uh, I mean, so of course where there’s a void people will fill it, and and therefore there’s like feverish speculation, are is he going to sell Taiwan down the river, you know, in exchange, I don’t know, for, uh, some sort of big semiconductor breakthrough? Is he, is he interested? And I think the answer is almost certainly no, to the to our detriment, but is he interested in having China and the US cooperate on AI parameters and safety tools for the sake of humanity? Putting some guard rails, um, because otherwise, nobody’s, nobody’s going to accept AI regulation in this country, um, uh, it’ll always be vetoed because the argument will always be it’ll slow us down and China will win. And, and it’s a very cartoonish idea of, you know, there’s a finishing line, whoever gets to AGI wins. I think that’s, I’m very skeptical of that. But that’s how it works. I don’t think Trump is interested in that. This is because it involves long term, um, it involves thinking long term. Um, so what does he want out of it? I mean, it’s scarcely conceivable, well it’s scarcely credible, but I think he he wants like things like soybeans and Boeing jets. He’s he’s firmly lodged in the 20th century. Um, and you just can’t get his head out of it.

Yes sir.

Dave Onsgard, retired. Uh, I’ve heard that, uh, I’ve heard the name Bharat, you know, up there like, uh, being called India. And I went to the World Expo 25 in Japan, and that’s what the was on the pavilion there for for India, Bharat. So my question is, is that the name we’re supposed to be calling India now? Is that the uh, old name or what is, okay, I was just curious.

It might become the name. I know there are certain people around Modi who would like to change the name. Uh, be difficult. I wrote a piece saying that you have an entire ocean named after you, why would you change your name to Bharat? You know, the Indian Ocean. His name, wait, point the mic up.

You make a valid point there, but Sri Lanka and Bharat has a big argument over that.

They did over the ocean, yeah. Oh they wanted the ocean too? Oh wow. Okay.

With India. So you have an entire, you’re the only country in the world with an entire ocean named after you. Why would you change your name to Bharat? Nobody’s going to call it the Bharat Ocean.

But, Sunil?

Sorry. No no, I agree.

I’m not trying to put you on the spot, but I think I respect your deep experience and your writings a lot. So I’m gonna post this question as let’s look back a bit. I mean if you think about a historical experiment. Starting in the 60s and 70s, India were, India and China’s per capita income were about the same. Two very large countries, same region. Um, we look at China now. Even let’s ignore the second Trump administration. Say till 2020. Um, the question come that comes to my mind and I’m posing it to you, is how come China, an authoritarian China, um, was able to make use of the opportunities offered by the world better than a pluralist, secular India? India is secular by in its constitution, so it is a secular country. Uh, how that plays out is different. But why was India not able to um take the opportunities as the way China was?

So if if China didn’t exist, we would be talking about the India miracle, because the sort of scale of humanity that has been lifted out of absolute poverty is extraordinary. Um, but it is democracy and it’s a very plural society, and that slows down decision making because you require some degree of consensus. Um, and in an autocracy, particularly where it’s a sort of totalitarian, under Mao it was more leaning totalitarian autocracy, and Xi Jinping has moved it back to sort of hard authoritarian from the Jiang Zemin and Hu Jintao years. Um, you know, you’ve seen a deepening and an acceleration of a various sort of growth enhancing and society reforming measures that would be extremely difficult to do in any democracy. But it brings with its uh um its own sort of perils. I mentioned Mao, I mean it can go really hard and unified way in the wrong direction in catastrophic directions. And there are limits to what it can achieve. I have no idea what India could do from the center to address the gender gap. This is another sort of hidden source of of growth that could be unlocked if India did address the gender gap. Uh, but I do know that, you know, China can penalize you for having more than one child um when it had the one child policy, it’s much harder to penalize anybody for not having more than one child, which is now the policy. It’s like you can’t say, you didn’t have three, we’re finding you. Uh, people are just refusing to have more than one child, they’re too expensive. Um, and this is a real problem that China created for itself because of its system, which will lead to lower growth. And is part of this sort of demographic this demographic that China, you know, um, is is not rich and it’s slowing, it’s its demography is beginning to shrink. Um, so it’s it’s by no means clear that we’ve got the right time frame here. If you if you asked me in 2047, um, it might look a little bit different.

You know, um, Ed talks about the gender issues also, I didn’t raise that question with you. We just had a very interesting session just before your session on gender, so just, that’s what,

Okay. I’m sorry I missed it. No. Yes please.

Thank you. On AI and emerging technologies, the CIA, all of them are, you know, very much focusing on that as being a measure of growth, a measure of, you know, almost everything, if you add robotics and kind of embodied AI. Um, and when you mentioned birth rate and population in my mind, and I’m a retired professor, I think that might be something that they are thinking might be some replacement in a small way. But coming back to the AI and emerging technologies, how do you see what India has leaned into, can further lean into, and kind of truly make that a competitive advantage to also substitute its, you know, GCCs and the typical IT framework which is definitely under some kind of retrenchment? Thank you.

Um, I mean I think the idea of a sort of mass um South China style manufacturing employment is a bit of a chimera. I mean there are clearly pockets particularly in the south maybe the west of India that are that are really good up to sort of, I don’t know, Malaysia, Vietnam levels of sort of um integration into the global supply chains and Six Sigma reliability in terms of quality etc. Um, but it’s not going to solve the Hindi belt’s um employment problems. Um, manufacturing, now of course there are sects that manufacturing is good and good jobs produce downstream jobs, so we you can create a lot more jobs indirectly through manufacturing and there are things that India can do um that would make it more um more of an attractive des destination as an alternative to China. But right now, you know, I I would I would suggest looking at what Vietnam has done, because Vietnam is getting so much more of it. Um, and um getting getting all the stuff we were talking about earlier right. Um, but India should be an AI power. Um, and I know there was this summit recently in Delhi. I can’t remember who it was, I was talking to a couple of people who went to it, and I was asking about it. Clearly now there is an ambition. Um, and India could be, India could be a very interesting swing state in this AI um, you know, US China um situation, that, you know, might might have sort of third way approaches to this critically important new general purpose technology. Um, the talent is there. Um, the ability to um do things at scale is is there. Um, but it’s not going to solve the employment problem. I mean that that’s, I wish I had, I wish I had the, the answer to that question is going to be like one of those administrative reform lists, there’ll be about a hundred items on it, and um uh I wish I had a sort of simple answer.

Anirudh?

Um, hi. uh, get a mic please, yeah. Anirudh Suri, I’m with the Carnegie Endowment. Um, my question is around middle powers, right? Um, so as you think about this US China competition, to what extent do you feel the middle powers, whether it’s on trade and economic integration that you were referring to, uh, or geopolitically, or militarily, how feasible do you think this, you know, appeal to the middle powers to come together in a world that seems to be in a US China duopoly framework today, do you imagine that that middle power piece can actually work out? And if so then how should a country like India’s foreign policy maybe adapt accordingly?

Uh, so this Khani, you know Khani framed it, um, I don’t think he was proposing a formal sort of structure or alliance of middle powers, a sort of NATO of middle powers or a WTO of middle powers. I think he was talking about a la carte multilateralism. Plurilateralism. Um, ad hoc, um, and just a lot more cooperation um between countries that are I’ve lost the habit of taking big initiatives because they’ve been infantilized by America. And they just wait for America to take initiatives. And Khani is both sort of um blessed and cursed by having the initiative forced on him or down his throat by this extraordinary predatory um behavior from from the American president. Um, and so he’s he’s taking the initiative out of necessity. But I think that that that he’s kind of the canary in the coal mine. I mean it’s it’s worth it’s worth responding to Canada and thinking creatively, and there are a million things we can think of that should be happening if there is no such thing as cooperation between the US and China. Um, that doesn’t mean to say we’re all just um bystanders, you know, watching watching a game of cricket from afar without being able to do anything about it. We can take the we can take our own initiatives. It’s a lot more difficult though to to get lots of countries together than to have one country tell other countries to fall in line. I mean it does involve a lot more work, but I applaud Khani. It was a very well, maybe it was slightly too bold, to speak, maybe 5, 10 percent a little bit too bold, because Trump started talking about the Governor of Canada again and he hadn’t been saying that for about a year, since Trudeau left. Um, uh, but it was a really it was the best possible I thought, clearest possible framing of just how much this rupture has changed how we should approach the world. Um, India, well India should be, I mean it would be the biggest middle power right? India should be taking initiatives. Um, and I understand um there’s a certain inertia to Indian foreign policy. Um, that’s always that’s always a little bit surprising to people. They expect India to be a bigger presence on the global stage than it is. Um, even in the Gulf, it’s not the biggest presence. It should be a huge presence in the Gulf. Beyond having lots of remittances and stuff and and imports coming through the Strait of Hormuz in better times. India should be a a bigger player. Um, and and this would require I think a little bit of a change of mindset as to how India conducts diplomacy. Um, it’s it retains a lot of the defensiveness of the non-aligned and immediate post-colonial era, it should be acting more confidently and taking and more entrepreneurially. And this is a very, the Khani framing is a very good way to think about India’s potential leadership in in many areas.

Susan?

Hey Ed. Read your mic. Sorry. Hi. Ed, it’s great to see you. Um, so I wanted to ask you about India’s soft power and trust in the world, and you just had mentioned that in a sense India is still caught up in its post-colonial mentality, but Indian culture I think is really having a moment, um, and uh, whether it’s movies or music. Um, and I was just wondering like where do you think that relationship is, you know, is that a real opportunity for Indian service exports such as this AI, um, because of that culture and the attractiveness of that culture, is there trust in India as a democracy versus China that might help it trade wise? What is that bullshit?

There should be, but I mean, how long does it take, I think the average duration of a court case in India is 13 years, something like that? There’s a Jarndyce versus Jarndyce sort of quality, um, to the slow movingness of the Indian legal system. And if uh, you know, if if you’re confident which companies no longer are that China will uphold whatever your FDI sort of um memorandum of agreement was, um, then it’ll just sort of happen. China is committed, one stop shop, yep you’re a priority investor, everything we’ve agreed you can bank on. In India it’s very hard for any government to give that assurance. Because there is a massive backlog in cases, there always has been and you know always will be, that’s the nature of um independent judicial systems um in in most democracies. In India it’s especially true though. And it’s very, it’s it’s something that takes incrementally, adding more judges and more administrative courts and simplifying contract law and it takes quite a long time to address, but if this were addressed with more urgency, it would make a huge difference to the trading and investment sort of potential partners India has. And I have to just sort of add to that something quite unrelated, tourism. India should be the largest tourist destination in the world. It’s extraordinary the number of things to see and the range of it and the sort of enchantingness of it. Um, and I believe it gets, it still gets fewer annual visitors than somewhere like Belgium. You know, which, I, I like Belgium, and some of my best friends are from Belgium, but uh, you know, it shouldn’t be like that.

So one more question? Okay, Ahmed.

Thank you. I was a bit surprised to see that you hadn’t mentioned human capital development as one of the bigger barriers in the 1950s. Milton Friedman when he went to, uh, when he went to India, uh, he said that India was not paying enough attention to human capital development. So I’m wondering how much of that has changed. Obviously, you know, literacy has increased and there are many people, more people going to colleges. But the quality question comes in. The quality of education, the breadth of good quality education, as China has. You know, India is now importing or sending students outside to study to the tune of 70 billion dollars a year, right? It it signals something is wrong with even the higher education system. So, you didn’t mention this, and here it relates to the fact that how much can the center handle this? How will it be addressed in India?

Is education a state or a concurrent subject? It’s concurrent. Um, clearly there have been improvements. There have been improvements from a low base. India’s still got functional illiteracy or semi-literacy is still a big problem, but mass illiteracy is playing less and less of a problem. Um, so as is true of so many um sort of problems that India faces, it’s going in the right direction, too slowly. Um, and you know, we have a tendency to look to the state to solve everything, but I think the state has shown it’s not particularly good at mass education. It’s great at sort of setting up elite ones that feed engineering schools and stuff that then you know, uh, then emigrate and make other countries money. Um, and so I think some states do this really well, particularly in the south, and they are rewarded economically, and that demonstration effect should be spreading more quickly than it is. Um, again I sort of as is so often the case I wish there were sort of a lever that you could say the union government should pull that, and then things would accelerate. But it is it is it is more um it’s a multi layer challenge. Um, but India is going, it’s addressing it too slowly. Human capital is the key to growth. Um, and and I’m and tapping un un unlocked unused potential whether it’s the gender gap or whether it’s sort of rural large sections of rural India. I mean India, when I moved to India only, you know, not much more than a quarter of a century ago, uh electrification was something like I don’t know 65%? It’s now about 98%. I mean things things do get even incrementally, suddenly you can see there’s quite a lot of change. Um, but the literacy one is is is the key to long term growth. And it’s the key to innovation and it’s the key to spreading prosperity and therefore to social stability. So uh it’s a very important question. I wish I had a clearer answer.

As one of the people who endorsed Ed’s book, Professor Amartya Sen has been reminding us for years and years. But thank you so much, Ed. That was just, I mean, those who came for lunch got such a wonderful treat. And uh, thank you so much for this uh, you know, mind-bending uh, conversation. You know, 20 years ago I had thought when I bought your book that one day you’re going to sign it for me. And I’m not going to let you go unless you sign this book for me.

Oh, it’s a delight. Thank you very much. That’s very kind. Thank you. I have a pen. There’s a pen on that side. Oh, you mean on this side? Thank you, Ajay. That was a delight. That was um…