India Becomes the Sixth Largest Economy in the World


According to the World Bank’s updated data for 2017, India is now the sixth largest economy in the world standing at $2.597 trillion at the end of last year. India surpassed France, which stands at $2.852 trillion. This growth is an impressive feat, considering ten years ago India’s GDP was half to that of France. India’s GDP saw a growth of 7.7% in the last quarter of 2017, contributing to the overall larger number.

There are a few factors mainly responsible for India’s stable growth. Firstly, there has been more stabilization of growth within sectors such as agriculture, industry, and services. Second, India’s overall economy has also shifted towards the services sector, where growth is more stable overall. Additionally, growth has also been broadly diversified, growing the fastest in services, then industry and less so in agriculture. Finally, a massive contributor to the stability of growth has been India’s resilience to shocks, both domestic and external. For example, the 2008 global recession affected India only the first year. India immediately bounced back in 2009, with an impressive growth rate of 8.5%. India’s economy is diverse in sectors and geography, and this largely contributes to the resilience of the country’s GDP. India’s production structure is diverse due to its ability to produce a multitude of products, commodities, and natural resources. India’s trade basket is also broad, consisting of a diverse set of trading partners, so a slowdown in one part of the world does not have a drastic effect on India’s economy overall.

All of these factors have helped India grow consistently. India’s recent accelerated growth mainly stems from an increase in consumer spending. Estimates suggest the growth will be continuous and accelerated. According to the International Monetary Fund, India is projected to grow a total of 7.4% this year and 7.8% in 2019. India has been undertaking multiple consumptions, and tax reforms, that are seemingly working. According to the Center for Economics and Business research, India has a good chance at becoming the world’s third largest economy by 2032, given current trends continue.

However, another factor to consider is that India is also the second most populated country in the world, set to become to the first, surpassing China, by 2024. India has a population of 1.3 billion people. When considering those numbers, India’s $2.59 trillion does fall short of providing everyone in the country with sufficient income to live well. India’s GDP per capita is $1,940, twenty times lower than France’s $38, 477 and about four times lower than China’s $8,827. Even though India’s GDP has been growing consistently, its GDP per capita has seen a lot more fluctuation and an overall decline in the past fifty years, due to its growing population. The impact of India’s GDP growth can only be wholly beneficial if population growth slows as well and income inequality stays low. There is a still a long road ahead to development for India, but it is definitely in the right direction and on the way.

India’s economy has been growing consistently at impressive rates. In addition to the 7.7% growth in the fourth quarter, India grew a total of 7.1% in 2016 and 8.0% in 2015. Since the 2008 recession, India’s GDP growth has not fallen below 5.5%, staying consistently higher. However, the country’s growth is not just limited to recent short-term numbers. In addition to short-term fluctuations, India has had a long-term steady growth as well. India’s long-term economic growth has steadily accelerated over a fifty-year period, without any prolonged reversals. GDP growth from the 1970s to 80s averaged 4.4% but accelerated to 5.5% from the 1990s to early 2000s, and further 7.1% in the past decade despite the recessions. Point to be noted here is that, not only is the economy growing at an accelerated pace but the growth of the economy is also accelerating. This accelerated long-term growth proves that the current exponential growth is not an exception but a continuation of the trend. It also goes to show that it is possible to retain the current growth into a long-term trend.

India Could Learn from American Success in Electric Vehicle Industry


As awareness about climate change increases has sparked the move away from gas and diesel powered vehicles and a move towards electric vehicles (EVs). Countries all around the world are introducing programs and policies to make electric vehicle ownership more attractive to prospect consumers, and many of these programs are having considerable success. The United States has implemented several policies to jumpstart the EV market, and as a result, the United States is now home to one of the largest electric vehicle markets in the world. In 2017 nearly 200,000 electric vehicles were sold in the United States. The December 2017 sales confirmed that electric vehicles held a share of 1.6% of the overall vehicle industry in the United States, with sales between June 2016 and June 2017 increasing 45% from the previous 12-month period in comparison to the overall EV market from 2012 to 2016 which experienced an annual growth of 32%. Such statistics are encouraging for the future of the industry.

As the EV industry in the United States continues to grow, the Indian market for electric vehicles has stuttered. In 2016, electric vehicle sales in India had only just passed 4,800 units. Demand for EVs is sparse, and the infrastructure and regulations necessary to spur the market are insufficient. While legislature in the United States emphasizes incentives for buyers of electric vehicles, Indian government policies primarily look to incentivize the production of electric vehicles by providing subsidies and tax rebates to producers. In 2010, a massive subsidy package for electric vehicle manufacturers of up to ₹950 million was announced, but this plan was swiftly ended in 2012. In 2015 the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) plan were announced, along with ambitious goals of 7 million EVs on Indian roads by 2020 and production of exclusively electric vehicles by 2030. FAME provided further subsidies to producers, along with incentives for state governments to introduce EVs in public transport. However, such incentives were only available to cars manufactured in India; this, in turn, reduced market competition to only Indian manufacturers, thus further increasing the price of electric vehicles and deterring possible buyers. While FAME also laid out plans for charging infrastructure around the country, there are still less than 250 charging stations in all of India, making EV ownership a difficult task. Thus, with no incentives and high costs for buyers, and low demand, the Indian EV market is struggling to gain momentum.

Considering the difficulties faced by the Indian EV industry, the government could certainly use the example of the United States to guide their own policy decisions and spur the market. A study by the International Energy Agency suggested that four major policy factors contribute to electric vehicle markets. Those included: research and development support, clear and achievable targets, financial incentives, and policies that increase the value of owning electric cars. Indian EV policy can be implemented in all four areas, with increased funding for EV research potentially reducing the costs for producers, and more achievable targets engendering genuine motivation from EV manufacturers. Financial incentives similar to those in the United States (such as tax credit and exemptions) could also stimulate the industry while other policies, such as reduced toll fees and dedicated parking spaces for electric vehicles could be implemented to increase value for EV owners.

The Indian government has already announced plans to reduce the bureaucracy surrounding EV ownership, eliminating one of the significant factors that deterred people from buying EVs. The government could even go one step further by introducing incentives for local governments to purchase EVs for municipal fleets. Considering a large number of public transport vehicles in India, this could help lead the population by example, garnering a collective sense of urgency about this matter. If India were to use the United States as an example and implement similar policies, then India would not only gain a flourishing EV industry but also achieve better, cleaner air and a better overall economy.

Indian-American Candidates Fundraise a Record-Breaking Amount of Money

Indian-American political candidates are breaking a whole new glass ceiling as 20 U.S. Congressional candidates raised a record 15.5 million dollars in political donations this election period. Seven of the candidates have each individually raised over 1 million dollars this election period, and leader of the pack, U.S. Representative Raja Krishnamoorthi, has raised more than $3.5 million in his re-election campaign in Illinois’ 8th Congressional District. Ro Khanna, who is seeking re-election from California’s 17th Congressional District, has raised $2 million, according to the Federal Election Commission. Congressman Khanna is followed by Dr. Ami Bera ($1.7 million), who is seeking his fourth consecutive term in the House in California’s 7th Congressional District. Pramila Jayapal, running for a second term in Washington’s 7th Congressional District, has raised $1.3 million. These are awe-inspiring numbers considering the elections are still not for another four months.

The impressive amount of funding goes on to show the support received by Indian-American candidates. Indian-American candidates have established a solid foundation of community supporters who are not afraid to back their support with their financials. The networks of family and friends that exist between Indian-Americans is not only growing in numbers but also increasing in political sophistication and organization. The record-breaking funds raised speak to the dedication of the Indian American community supporting these candidates. In these contemporary times filled with constant advertisements, campaign donations can go a long way to help get the word about the candidates’ race, and their platforms. Overall, it is great to see the community support behind Indian American candidates as they make a bid to represent their respective constituents.

If you would like to support a candidate in your district or find out more about the Indian American candidates running this election period, please visit the USINPAC YouTube page and check out our 2018 Summer Interview Series.

Indian-American Seema Nanda Appointed CEO of the Democratic National Committee

On June 29, the Democratic National Committee (DNC) announced the appointment of Seema Nanda, an Indian American executive, as its incoming CEO. Nanda will take over the position from Mary Beth Cahill, the DNC’s interim CEO, later this month.

The search for the DNC’s new CEO started after former chief executive Jess O’Connell left the organization in January. After a lengthy search, the DNC tapped on the talents of Seema Nanda, who will be departing her current role as the executive vice president and COO at the Leadership Conference on Civil and Human Rights.

Interim CEO, Mary Beth Cahill said that Nanda undoubtedly fit the bill as the next Chief executive of the DNC. “With Seema joining our senior leadership team, I know that the DNC will be in good hands,” she said.

A graduate of Boston College Law School and Brown University, Nanda is a member of the Massachusetts Bar Association. She has previously worked with the Civil Rights Division of the Department of Justice, and the Department of Labor. At the Department of Labor, Nanda served as DNC chair Tom Perez’ chief of staff.

In a press statement, Perez said that he was confident that Nanda’s leadership will capitalize on the grassroots energy and enthusiasm of party contests in the coming elections. “I’m beyond excited that Seema is bringing her talent and brilliance to the DNC,” said DNC Chair Tom Perez. “I’ve seen first-hand Seema’s exceptional ability to lead. She is a seasoned manager who has a proven track record of success and well-documented history of fighting for our Democratic values, whether it’s on immigration, civil rights or leveling the playing field for our workers.”

Nanda stated that she was humbled and honored by the appointment. “People are hurting all across our country. And I believe that Democrats are offering the positive solutions so desperately-needed right now – solutions forged by the strength of our diversity, the rigor of our ideas, and the decency of our values. I am grateful to Chairman Perez and Mary Beth for selecting me, and I look forward to joining my new DNC colleagues in the fight for our nation’s values and future.” Nanda said in a press release.

Nanda’s appointment as the DNC’s chief executive is a reiteration of the fact that Indian – Americans are becoming more politically active. A record number of Indian – Americans are running for public offices in 2018.

USINPAC is current reaching out to Seema Nanda’s team to try and schedule an interview. We believe that Nanda’s new position as CEO of the DNC is further proof that Indian-Americans are rising within politics, and USINPAC is committed to keeping up to date with the latest Indian-American political news.

The Elephant in the Room: India’s Relations with South Asia

To say that India’s relationship with its neighbors has never been fraught with tension, would be an understatement. While India has been a major power in South Asia due to its strategic position, China’s increasing presence and influence in South Asia has led to concerns about New Delhi’s rising presence in the region. Another important player in South Asia—the United States—has its own concerns about China and considers India as an important strategic partner.

India – U.S. relations have recently turned sour on matters of trade. Furthermore, several South Asian countries have been strengthening their relationship with China. In an interview with Akshobh Giridharadas, a consultant with the South Asia Center at the Atlantic Council, USINPAC discussed India’s foreign policy vis-à-vis its neighbors and analyzed the U.S. – India relationship and its impact on India’s diplomatic position in South Asia.

India’s Foreign Policy Vis-à-Vis its Neighbors

The Modi Doctrine or the Foreign Policy of the Modi government, has had its fair share of ups and downs. Recent events in the Maldives, as well as Nepal’s overtures to China, have concerned India watchers, who believe that Indian influence is being challenged in its own neighborhood. However, the picture is much more complicated.

Akshobh Giridharadas explains that although there have been several challenges in India’s foreign policy towards its neighboring countries, the Modi Government has been cognizant of the importance of India’s neighborhood. “One of the things that Modi mentioned was that neighborhood was his first priority,” Girdharadas said, “Modi’s first visits after taking office were to Nepal and Bhutan and not to the US or the UK.”

However, Giridharadas stressed that the Indo-Nepal Relationship does require special care. He said that India and Nepal’s relationship is often overlooked for several reasons. First and foremost, the South Asian Association for Regional Cooperation (SAARC) is one of the least integrated areas in the world. An economic and geopolitical union of South Asian nations, SAARC has been encumbered by water disputes, trade disputes and even problems of security. India and Nepal, both happen to be members of SAARC. Furthermore, the presence of nuclear states such as Pakistan and China, in India’s neighborhood often overshadows other relations.

Although India’s foreign policy may understand the importance of its neighborhood, it does not always cater to them. “It is often said that SAARC as a region is very big brother dominated neighborhood and smaller countries like Nepal, Bhutan and Maldives don’t necessarily get a chance to voice their concerns,” Girdharadas said.

“In this context, India’s relationship with Nepal is often haloed, and it looks like everything is going very well, although the relationship with Nepal needs special care,” Giridharadas said.

Giridharadas also talked about India’s relationship with its other neighbors including Sri Lanka and Bangladesh. He commented that although India and Sri Lanka have a special relationship, recent and past events, such as the new Chinese ran Hambantota Port in Sri Lanka, have affected the relationship. Giridharadas also noted that under the Awami League, Bangladesh has pursued closer relations with India. However, the Indo-Bangladesh dispute over sharing the waters of transboundary river Teesta caused an “overall belief that India needs to engage more with Bangladesh,” Giridharadas stated.

The Dragon in the Room

The importance of Chinese influence in South Asia cannot be underestimated, neither can the importance of India’s relationship with China. Both countries are rapidly growing economies, members of the G20, and both are nuclear powers. Additionally, “Modi and Xi are some of the most popular and influential leaders in India and China respectively.” Giridharadas said, “So, both Modi and Xi have been making their presence felt on the foreign stage.”

The Indian Prime Minister Narendra Modi has been very keen on pursuing closer economic ties with China. Giridharadas looked back on Modi’s visits to China when he was still the Chief Minister of Gujarat. As the Chief Minister, Modi visited several Chinese provinces and invited several Chinese companies to contribute to his Vibrant Gujarat Summits. However, other aspects of the Sino-Indo relationship have made New Delhi wary of Beijing. “Of course you have the Doklam standoff of 2017, which evoked memories of the 1962 war.” Giridharadas said, “ Thus, there has been an overhanging cloud as to whether China can be trusted.”

India has been very concerned about China’s Belt and Road Initiative and a Chinese “String of Pearls” The String of Pearls theory refers to a network of Chinese developed and run facilities in strategic locations in the Indian Ocean. The Hambantota Port is seen as one such strategic facility. Another controversial project, part of China’s Belt and Road Initiative has been the China Pakistan Economic Corridor (CPEC), which runs through the contentious Kashmir region.
Girdharadas noted that while New Delhi is not too happy with the China – Pakistan collusively, India has its own trade relations and barriers with China. Furthermore, “the Wuhan summit has helped in resetting the relationship.” Giridharadas said.

India’s willingness to work on Sino-Indian ties was demonstrated during the Shangri La Summit. “Even though James Mattis tore into China during the Shangri – La summit, Modi reiterated that he was optimistic about working with China,” Girdharadas said.

Where does the U.S. Fit In?

In addition to big brothers like China and India, South Asia has been of considerable interest to the United States as well. “The U.S. looks at India as a democratic counterweight to China, even though experts in India and China do not see India as a counterweight to China in the same sense,” Giridharadas said. Giridharadas expanded on this by explaining that the foreign policy coming out of India has always included unilateral engagement with everyone, including countries such as the United States, China, and Russia without being subversive to anyone. In fact, India has always been wary of power blocs given its legacy of the Non-Alignment Movement. “The fact that India is developing its unilateral relationship with China should not be seen as a snub to America and vice-versa,” Giridharadas said.

However, the U.S.-India trade relations have been frosty, but Girdharadas believes that matters of trade aside, the U.S. continues to view India as a strong strategic partner since both countries share some common ideas, concerns, and democratic ideals and values as well. Giridharadas stated the example of Canada and the recent U.S.-Canada trade disputes. “It is not a Washington-Delhi problem, but a Washington problem,” Giridharadas said. “Yes, India and the U.S. will disagree on various aspects of trade, but this will not stop a robust India – US relationship.”

India and the U.S. have become increasingly concerned about China’s influence in South Asia and the Indo-Pacific. Other common interests include security and defense. Thus, in recent years India has been purchasing more weapons and increasing military cooperation with the U.S.

Giridharadas credited the Indian diplomacy for maintaining a strong U.S.-India relationship. “India’s diplomacy has always been that we will work with whoever is in power and it is a credit to them and Prime Minister Modi that they have continued to work very well with the US under two very different administrations – i.e., the Obama Administration and the Trump Administration,” Giridharadas said.

An improved US- India relationship and India’s Neighborhood

Having a paramount relationship with the U.S. can definitely help India gain diplomatic ground in its neighborhood, especially amongst smaller countries in the region. However, Giridharadas cautioned that a strong U.S.-India relationship would propel Pakistan closer to China.

“There is a saying, ‘Everyone wants the U.S. as its friends, but no one wants China as its enemy,” Girdhardas said. Yet, the Indian diplomacy has the potential to dispel tensions with China caused by a close U.S.-India strategic partnership. India believes in unilateral engagement with everyone in the region without compromising on its own interests.

“There will be no adverse effects or long-term setbacks to the strategic partnership between the U.S. and India,” Giridharadas said.

Akshobh Giridharadas is a consultant for the South Asia Center at the Atlantic Council. A journalist by profession, Giridharadas was based out of Singapore as a reporter and producer with Channel News Asia, Singapore covering international business news. He writes on diverse topics such as geopolitics, business, tech and sports. His previous endeavors include working at ESPN STAR and FOX networks. He is a TEDx and Toastmasters public speaker and is currently at the Fletcher School of Law & Diplomacy, Tufts specializing in international affairs.