India is Already the Third Superpower

The Indus River Flows Through Silicon Valley

Nothing demonstrates the way in which the Indian diaspora has changed the world better than the pre-eminence of people of Indian heritage in the US tech sector. Twenty five major American tech corporations with a combined market capitalisation of over five trillion dollars are headed by Indians, from Microsoft (Satya Nadella) to Alphabet/Google (Sundar Pichai) to IBM (Arvind Krishna). Neal Mohan heads up YouTube, while Thomas Kurian is the boss of Google Cloud. And it’s not just tech. Deloitte in the US is run by Punit Renjen, Novartis by Vasant Narasimhan and FedEx by Raj Subramaniam.

If this list sounds disconcertingly male (though not pale or perhaps stale), consider the CEOs of Chanel (Leena Nair), OnlyFans (Amrapali Gan) or, until last month, Vimeo (Anjali Sud). Indian-American women also constitute a formidable cohort in the American workplace.

Of course, some Indian-Americans are more American than others. Nadella was born in Hyderabad and came to the US in his early twenties to study computer science at the University of Wisconsin-Milwaukee. Pichai was born in Tamil Nadu and, like Nadella, came to the US to study – in his case at Stanford University. Krishna was born in Andhra Pradesh and arrived in the US in early adulthood to undertake a PhD at the University of Illinois. On the other hand, Niraj Shah, the founder and chief executive of Wayfair, the online superstore, which is knocking on Amazon’s door, was born in Pittsfield, Massachusetts and grew up in Maryland.

Incidentally, Pichai and Rishi Sunak are both members of the Stanford Graduate School of Business Advisory Council, a consultative body of Stanford alumni. It is quite probable that they know one another. Oh, to be privy to those emails…

There are now four-five million US citizens of Indian heritage. They constitute one of the most influential and wealthiest ethnic-minority groups in the US.

Ramaswamy & Co.

The surprise winner of the Republican presidential candidates’ debate in Milwaukee last Wednesday (23 August), broadcast live on Fox News, was one of the outsiders – Vivek Ramaswamy. Mr Ramaswamy is normally described as a tech millionaire who has had no previous involvement in US politics at any level. Yet most polls of Republican voters suggest that he has now overtaken Ron DeSantis, the Governor of Florida, in the race to win the Republican nomination next year – though he still lags well behind Donald Trump who abjured the candidates’ debate with Olympian disdain. There is much speculation that, assuming that Mr Trump were to win the nomination (which in my view is unlikely given the legal quagmire in which he is now sinking), he might nominate Mr Ramaswamy as his running mate. For his part, Mr Ramaswamy is the candidate best disposed to Mr Trump and has declared that he would pardon the former president of all convictions as soon as he (Ramaswamy) becomes president.

Mr Ramaswamy was born in Cincinnati 38 years ago to immigrant parents – Tamil-speaking Brahmins from Kerala. He founded Roivant Sciences in 2014. Roivant seeks to bring a diverse pipeline of experimental drugs to market. In August Forbes estimated Mr Ramaswamy’s net worth at over $950 million.

In a statement on his official website, Mr Ramaswamy says:

“I am the first millennial ever to run for president as a Republican…We are in the middle of a national identity crisis. Faith, patriotism, hard work and family have disappeared only to be replaced by wokeism, transgenderism, climatism {sic} and Covidism {sic}…I am all for the America First agenda. But to put America first we need to rediscover what America is…I’m talking about America first 2.0…”

Mr Ramaswamy’s innate conservatism is rooted in traditional Indian values. If Mr Trump is finally undone by the swamp he once vowed to drain, then Mr Ramaswamy might well emerge as his heir – and he could inherit much of Mr Trump’s core support. Things could then get interesting.

The other Indian-heritage presidential candidate at that debate was Nikki Haley. Ms Haley is a significant figure who served as governor of South Carolina (2011-17) and as US ambassador to the United Nations (2017-18). Many people suppose that “Nikki” is a short form of the Christian name Nicola; but, in fact, it is a Punjabi word meaning “little one”. Ms Haley’s parents, both academics, were immigrants from the Punjab who came to the US via Canada. While Ms Haley’s parents are Sikhs, she reportedly converted to Christianity in 1997 further to her marriage with Michael Haley, a Methodist.

Both Mr Ramaswamy and Ms Haley take a hard line on China. Mr Ramaswamy habitually refers to China as “our enemy”. Unlike several other Republican candidates who are agnostic on the Russia-Ukraine war, including Mr Trump, Ms Haley forcefully backs continued US military aid to Ukraine.

According to sources close to the Daily Telegraph, Ms Haley is the Republican candidate that Mr Biden’s campaign team fear the most. A senior Democrat strategist close to the Biden campaign told the Politico website: “If they nominate Haley, we’re in trouble”. Ms Haley’s campaign apparently raised more funds in the 24 hours after the 23 August debate than any day before the campaign started.

We should not forget that the USA already has a Vice President of Indian heritage – Kamala Devi Harris. Vice President Harris’s mother was a Tamil Indian biologist who emigrated to the United States aged 19 in 1958. Ms Harris has not been a particularly impressive Vice President, according to most commentators; but it would be politically inexpedient for President Biden to drop her as his running mate – assuming he is indeed the Democratic party nominee next year.

Given Mr Biden’s senescence and his evident cognitive decline, it is quite possible that he might have to retire during the course of a second term. In which case, America will get its first Indian-heritage president via another route. Though I might remind my American friends that we beat them to it – we Brits have had a Hindu prime minister since October last year. Although, to be fair, our Irish friends and neighbours first elected Leo Varadkar as Taoiseach in 2017. His father, Ashok, was born in Mumbai (though his parents met and married in the UK).

Meanwhile, Back In The Subcontinent…

India overtook China as the most populous nation on planet Earth at around the beginning of this year. India now has an estimated 1.4286 billion citizens compared with China’s 1.4257 billion. But China’s population is declining rapidly, while India’s will continue to rise for some years before it too begins to decline.

And while the economic news flow from China is dire, India is ticking along nicely. India’s economy, at last, is now growing faster than China’s. In fact, India is now one of the fastest growing economies in the world. In the year fiscal year to 31 March growth was 7.2 percent, though that figure reflects the continued post-Covid bounce in economic activity.

According to most estimates, India has overtaken the UK in terms of its nominal GDP and is therefore now the fifth largest economy in the world. It is quite possible given the current economic trajectory that India will succeed in overtaking Germany and Japan in the early 2030s to become the world’s number three economy after the USA and China.

Fly Me To The Moon – Indian Style

Chandraayan 3, an Indian space probe, landed near the South Pole of the moon on 23 August after a 40-day journey from Earth. This extraordinary technical achievement was amplified by the contingent fact that an analogue Russian mission crash landed a few days earlier. Both nations were represented at the BRICS summit in Johannesburg. But it was India that was lauded.

The reason why the South pole of the moon is of interest is that there may be glaciers there which could be a source of water which would make future human bases possible on the moon. The moon may be of limited economic value – we don’t really know – but it will likely be a staging post within two to three decades for missions to Mars which will undoubtedly be of economic value. The rover that Chandraayan 3 has now deployed might well send back new information that will shape the course of the space race now underway. Space enthusiasts stay tuned.

India’s brilliant moon mission cost the country about £58 million. That is approximately what it costs to build 300 metres of the Johnson-inspired white elephant, HS2 (which we now know will probably never be completed). But then India, like Britain, has a reputation for infrastructure projects which take longer than projected and which go well beyond budget. At least, in India, when you cross a bridge, a digital information panel informs you of its internal rate of return (IRR). This is evidence of how seriously public investment is taken in India. Consistent capital investment is the main engine of India’s recent growth spurt.

It is interesting and pleasing to note that a significant proportion of the top space scientists at Indian Space Research Organisation’s (ISRO) Telemetry, Tracking and Command Network (ISTRAC) in Bengaluru are women. When the lander module touched down the ISRO leadership team addressed the nation. Along with the four men at the podium there was one woman, Dr Kalpana K. Nothing could demonstrate better how India’s investment in women’s education over the last three decades has paid off. It is quite possible that the first Indian to walk on the surface of the moon – and/or Mars – will be a woman.

BRICS And Mortar Fire

The summit of the BRICS countries (Brazil, Russia, India, China and South Africa) in Johannesburg last week (22-24 August) has been compared to the 1955 Bandung Conference which inaugurated the non-aligned movement. That steered a path for India and others between NATO on the one hand and the Warsaw Pact on the other throughout the Cold War. The BRICS’s decision to admit six new members – Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates – seemed to some like a bid to refashion the world order. Supposedly, more than 40 countries are vying for membership – though a formal list of which countries has never been disclosed.

The bloc, however, is not a cohesive geopolitical grouping. It started life as an acronym invented by Goldman Sachs. It is more of a club of wannabe top-dog states each of which seeks to use the jamboree to advance its individual interests. South Africa is resentful that it was excluded from the G-7 summit earlier this year. Brazil wants to be seen as a facilitator. Russia is a state sanctioned by the West – Mr Putin contributed on a video link, presumably because an International Criminal Court warrant for his arrest hangs in the ether.

Most importantly, India and China are the opposite of friends. China is best friend to India’s arch-enemy, Pakistan. (Russia, in contrast, has normally supported India against Pakistan). China’s Belt and Road Programme has ensnared several of India’s neighbours, not least strategically vital Sri Lanka. Indian and China eye each other warily along their long border in the high peaks of the Himalayas. They quite frequently come to blows on the ice in intermittent border wars in Ladakh and in Arunachal Pradesh. Indian blood has been spilt on snow by Chinese forces.

India wants to cast itself as a champion of the aspirations of developing nations. But it has always wished to maintain an independent foreign policy. For that reason, India did not want to turn the Quad (correctly, the Quadrilateral Security Dialogue of India, the USA, Japan and Australia) into a formal military alliance. That is because India does not want to be dragged into a war which is not of its own choosing.

Many of us in the West have been disappointed that Mr Modi cannot just condemn Russia’s war against its neighbour, Ukraine. But Modi does not want to be seen to have joined the West, even if much educated opinion in India regards Russia as an aggressor. Russia has historically been a major supplier of arms to India – though India has also bought weapons in quantity from France. More recently, India has been buying discounted Russian oil at scale. About 40 percent of India’s crude oil imports currently come from Russia. India’s priority is India. The country will never join an Indo-Pacific “NATO Plus”, even if India is already sharing a limited amount of military intelligence with the West.

The BRICS summit’s concluding communiqué was long on aspirational rhetoric – including commitments to “inclusive multilateralism” and “mutually accelerated growth” – but essentially vapid. Criticizing America is easy to do; building a new global state system is something else – and it is not quite clear that India is on board with that objective.

As the geopolitical analyst Ian Bremmer asked recently: Whose side is India on? President Biden gave prime minister Modi a warm reception in Washington in June, and Mr Modi was only the third foreign leader (after Churchill and Mandela) to be given the honour of addressing Congress for a second time – even though Modi was banned from the USA for a decade after 2002 for his alleged role in the Gujarat riots. But that does not make India and America best friends. President Putin called Mr Modi “a great friend of Russia” the same month. India’s strategic ambiguity (if that is the correct term) arises from her unique geopolitical situation.

In June, Mr Modi signed a massive arms deal with the USA. India is buying US drones to boost surveillance along its long contested border with China. It will jointly assemble fighter jet engines with General Electric in India. US memory chip maker Micron (of which the CEO is another American-Indian, Sanjay Mehrotra) was recently banned from key infrastructure projects in China on national security grounds. Now, it will build a US$2.75 billion plant in Gujarat, its first in India. The US will also open consulates in Bengaluru, India’s third city, and Ahmedabad, Modi’s place of birth.

Indian Markets

The Mumbai stock market has done well this summer as international investors go underweight on China and reallocate to the alternative Asian giant. Indian equities gained from $13.5 billion of foreign inflows in the second quarter of this year. Investor enthusiasm is being sustained by strong corporate sector earnings. The key Mumbai stock market index, the BSE Sensex which tracks 30 large-cap Indian stocks, hit an all-time high in late July since when it has retreated slightly. The current earnings multiple is around 22. Thus, some analysts consider that the Indian equity market is expensive, while others think it has much further to go. The argument that many institutional investors have used regarding China – the country is too significant a player not to invest there – now also applies to India.

The Reserve Bank of India is determined to keep the rupee strong, even as other Asian currencies weaken. It continues to replenish its foreign exchange reserves, now worth nearly US$600 billion. Its repo rate still stands at 6.5 percent. The nation’s debt-to-GDP ratio is running at around 83 percent, this being below that of many advanced countries.

The fear is that India’s construction boom will end in tears as has China’s. This is misplaced.

Under Narendra Modi’s BNP government which came to power in 2014, India has been frantically investing in new infrastructure, with some $60 billion having been spent on roads and new rail lines alone. India’s road network has expanded by 40 percent over the last decade. Yet the horrific train crash at Odisha on 02 June in which nearly 300 people were killed and nearly 1,000 injured, and the collapse of a railway bridge at Mizoram on 23 August, have raised concerns that new construction is of insufficient quality. Although in fact, India’s rail safety record compares well internationally. (Road traffic accidents are another matter. Anyone who has been chauffeured in India, as I have, will tell you it is a terrifying experience).

Next year construction will start on the eight-lane Delhi-Mumbai highway – a road 1,386 kilometres long which will cost a budgeted one trillion rupees. Over 70 million workers are toiling in the construction sector across India. While China is building roads to nowhere and apartments that will never be lived in, India is still getting a multiplier bang for every buck of public money spent.

Jai Hind!

For all the good news, let’s not ignore the charge sheet against Modi’s BJP-led India. There have been horrific episodes of persecution of segments of India’s Muslim and Christian minorities which have arguably not been sanctioned by state authorities. India has a youth unemployment rate of around one third. There has also been a crackdown on press freedom of late, which is deeply regrettable since it has been the relative transparency of public policy in India which has kept the politicians accountable. India still has enormous social problems and there is widespread poverty – even if the direction of travel is towards greater national prosperity. India’s next general election will take place in April or May 2024, and it currently seems likely that Mr Modi’s BJP will be returned to power. I’ll be watching closely.

Modern India has just turned 76 years old and can be proud of what it has achieved. India is still very much the world’s most populous democracy, if a flawed one – but to that extent it is not alone. It is a more humane superpower than China. After all, it is motivated by faith, not by atheism and materialism. And no one doubts the exceptional quality of India’s human capital.

Well done India! Jai Hind!

Listed companies cited in this article which merit analysis:

• Vimeo (NASDAQ:VMEO)
• Wayfair Inc. (LON:0A4A)
• Roivant Sciences (NASDAQ:ROIV)
• Micron Technology Inc. (NASDAQ:MU)
• General Electric (NYSE:GE)