INDIA'S GREATEST OPPORTUNITY

THE “GREAT GAME” IN THE 21ST CENTURY IS AN ECONOMIC CONTEST. INDIA NEEDS TO OPEN UP TO GLOBAL COMPETITION—IT LEADS TO SHORT-TERM CREATIVE DESTRUCTION, BUT LONG-TERM ECONOMIC STRENGTH

- Kishore Mahbubani

As usual, Shakespeare was right. As he said, “There is a tide in the affairs of men, which taken at the flood, leads to fortune.” Such a tide has now reached India’s shores. If India decides to sail out on this tide, it will achieve great fortune.

One fact is indisputable. No country has as great a gap between its potential and performance as India does. There is now global data that confirms that Indians are among the most naturally competitive animals in the economic realm, if not the most competitive. In the most competitive human laboratory in the world, the US, Indians are the ethnic group with the highest median household income (roughly $100,000). If Indians in India could achieve half the median household income of Indians in the US (say, $50,000), India would have a $20 trillion economy, about the size of the US today.

Why is this fact important? It is manifestly obvious that a new great game has begun. A major geopolitical contest has broken out between the US and China, as documented in my book, Has China Won? The Chinese Challenge to American Primacy. What will determine the outcome of this contest? Will it be the number of aircraft carriers each has? Or the size and affluence of its consumer markets? The answer is clear. It is the latter. One small piece of data indicates who is winning. In 2009, the size of the retail goods market in China was $1.8 trillion, while that of the US was more than double that, at $4 trillion. Ten years later, in 2019, the Chinese market had more than tripled to $6 trillion while that of the US rose only to $5.5 trillion. Ten years from now, especially after Covid-19, the Chinese market will be much bigger.