These are all important questions, but in our superpower discussions we can’t leave out India. There are some compelling reasons to believe that India will become a superpower, and possibly even become the dominant economic power of the 21st century.
Here are 5 reasons why India will become a superpower:
India’s economy is already much larger than many think
We generally use nominal GDP – which factors in the strength of national currencies – when we measure GDP. The Indian Rupee is not a strong currency, with 1 Rupee equalling 0.015 US Dollar. What does this mean? It means India is put all the way back at 7th place in national GDP rankings, behind France and just ahead of Italy.
However, when adjusted for purchasing power parity (PPP) – which many economists see as a much more realistic measure of economic strength – India rises all the way up to third in GDP rankings. The difference in the two measurements is huge. Measured by nominal GDP, India’s economy is $2.09 trillion. But measured by PPP, India’s economy is $7.97 trillion – behind only China and the United States.
India’s economy is growing faster than China’s
India now has the best growth of all large economies, with a rate of GDP growth of 7.3 last year and a projected growth rate of 7.6% this year. China grew more slowly, at a rate of 6.9% last year, and a lower rate of growth is expected this year.
If India can keep up their strong rate of growth, the compounding effects will generate massive increases in wealth and vault India higher up the GDP charts, especially with China and the US growing at a slower rate.
India has a young population
Europe is aging rapidly. America grows because of immigration, but is still aging. China could face massive challenges from their aging population. Japan is poised to lose tens of millions of people as their aged population begins to pass away.
Of all the massive economies, India has by far the greatest demographics for future growth. China’s economic surge was fuelled in large part by a massive population of young people entering working age and giving China an immense workforce, and India could be poised for a similar economic benefit.
With the U.N. projecting that India has the largest youth population – over 356 million people between 10-24 – India has a huge amount of potential workers.
Of course, having a bunch of young people in your country doesn’t guarantee success. India will need to provide opportunities for their youth, or that huge population could become a source of instability.
As Justin Fox writes in Bloomberg View, there are doubts about India’s ability to make the most of their young population: “The reason is that while India’s working-age population is immense and growing, a lot of those working-age Indians don’t seem to be working — at least not in ways that bring economic growth and social progress.”
Fox also points out that India lags far behind when it comes to participation of women in the labour force, with only 28.6% of women between 15-64 employed, a stark contrast to China’s rate of 70.4%. To take true advantage of their young population, and to have a chance at being the world’s largest economy, India must dramatically increase the participation of women in the workforce. If they can do that, the sky’s the limit.
India has a diverse and democratic society
India faces serious issues. The ongoing oppression faced by millions of women in India, widespread poverty, and weak infrastructure are all huge impediments to India achieving its full potential.
At the same time, India is the world’s largest democracy, a nation of amazing cultural, religious, and political diversity. This gives India the ability to address their problems out in the open and renew and adapt to changing circumstances. It makes the process look messy and disorganized, but it is also a safety valve for discontent and generates the entreprenurial creativity that drives growth.
Thanks to Bollywood, India is already a cultural superpower
Thanks to Hollywood, the United States is a cultural superpower. American movies, American shows, American stories, and American characters are shown around the globe. This gives America a power far beyond their economy, as millions, if not billions of people around the world are influenced by American cultural products. But India has amazing cultural products as well.
Bollywood could be bigger than Hollywood
Through Bollywood (a term for India’s film and television entertainment industry), India has immense cultural influence throughout the world. Bollywood is massive. Here’s what Niall McCarthy wrote in Forbes:
“The numbers are certainly impressive – in terms of the number of films produced each year, Bollywood is firmly on top of the pile with 1,602 in 2012 alone. The U.S. churned out 476 films that year while the Chinese managed 745. In the same year, Hollywood sold 1.36 billion tickets compared to Bollywood’s whopping 2.6 billion.”
Clearly, India has immense and growing cultural influence, a key factor for any potential superpower.
If challenges are overcome, India will become a superpower
The combination of cultural power, a massive and growing pool of potential workers, a diverse and democratic society, rapid economic growth, and an economy that is already larger than many realize, India has tremendous potential for achieving superpower status.
While there are significant challenges, India has the underlying factors needed to become one of the dominant nations, if not the dominant nation in the 21st century. Whether that potential is achieved will come down to the choices made by India’s leaders.
Follow Spencer Fernando on Twitter: @SpencerFernando
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