India’s Diversity is a Strategic Asset

Modern India stands as one of the most diverse countries in the world, a subcontinent that is home to over 100 languages, over 700 different tribes, every major religion in the world, and to some of the world’s largest cities as well as remote regions with almost no people. India’s diversity is reflected in its religions, ethnicities, customs, and social structures across a population of 1.3bn people and the country’s secular and pluralist approach since its inception has arguably helped India being to realise a “Diversity Dividend”. In addition to democracy (India being the world’s largest) and demographics (it has the world’s largest population of young people), diversity is a key asset in India’s favour which adds a crucial qualitative layer to propel India’s development and rise in global significance, which is expected to see the country cross US$5tn of GDP by 2025.

The prize of diversity is high, and the country’s prime minister Narendra Modi has repeatedly reaffirmed the government’s commitment to diversity and pluralism with a vision of a united and peaceful India. However, fully unlocking the value of India’s diversity will require meeting a number of political, economic and social challenges.

The economic and political incentives for India’s leaders to unlock India’s ‘Diversity Dividend’ are clear, increasing social stability, creating political capital for further structural reforms, reducing country risk and attracting foreign investment, and maximising the value of India’s human capital. Doing so will require India going further in advocating the primacy of diversity and rights within its borders, based on the principles of inclusion that the prime minister has advocated since assuming office in 2014.

India’s Economic Rise and the Role of Mass Inclusion

India’s road to significance and its upward trajectory is clear. India is now entering the steep third phase of its growth journey in its Rise to Global Significance (see chart below), which will see its economy multiply exponentially from US$3tn to US$7-10tn in the next decade, and to US$17-30tn by 2040 , propelled forward by five core drivers - its demographics, urbanisation, technological adoption, financial inclusion, and mass consumerism - which in turn are driving mass-scale inclusion of its large population in its growing economy. While the level of growth India can achieve over the near term will clearly hasten or delay these economic milestones by a few years , India’s upward trajectory is clear; and its growing economy and contribution to global growth (in a time where virtually every other major economy is slowing down) will in turn shift India’s power equation with the rest of the world, much in the same way China’s rise did when it entered its own steep economic rise after the Global Financial Crisis.

India’s growth trajectory will depend on a few key factors.While India’s long-term rise to significance appears to be an inevitability, how quickly India achieves the milestones that place it there depends on a few critical factors:

  1. Independent Drivers.The momentum and impact of five macro-economic drivers - demographics, urbanisation, technology adoption, mass consumption, and financial inclusion - that will drive the country’s fundamental long-term growth
  2. Supporting Policy and Internal Dislocations. Internal decisions and events can damage or support growth. As India’s Independent Drivers do not intrinsically depend on government actions (barring material intervention in the form of 3 below), so that the most effective support the government can give is in the form of removing obstacles to these drivers’ delivery of growth.
  3. External Supporting Events and Dislocations. External events that can either damage or support growth.

Earlier papers in the Sign of the Times have examined various scenarios and aspects of these three key issues, exploring the five independent drivers, supporting policies that the government can put in place to remove obstacles, how India can mitigate increased global risks, and how it can deal with its external security threats and engage with its neighbours, as well as with the US , China and other powers .

An important underlying factor affecting all five independent drivers is the ongoing peaceful development of Indian society. The country’s continuing status as the world’s largest democracy is a significant asset, and one that critically depends on India’s religious, ethnic, and cultural diversity. Its diversity, if properly leveraged, is a strategic advantage to the upward trajectory of the country’s economy and if mishanled, can lead to a dislocation.

Diversity, in the broader sense, encompasses diversity of thought, beliefs, a fundamental tolerance of others and willingness to accept and incorporate new ideas and peoples. For example, China does not welcome this breadth of diversity while traditionally, America does, and India in this regard has more in common with latter. If India can mobilise its people around a shared national vision, one that includes its cultural, religious and economic diversity it has the chance to create a significant competitive advantage over less diverse and therefore less flexible and creative competitors in the longer term. Doing so will enable India to magnify the value of the demographic dividend and capitalise on its democracy. It will also enable the government of the day to drive mass inclusion, maintain social stability and harness the goodwill of the international community as a nation of freedoms and this in turn will endow it with a potent soft power and attract investment flows that will help establish its position among the leading nations of the world.

India’s diversity is a function of history, geography and population. India is more like a continent than a country, in terms of the diversity of its peoples and the scale of its diversity. Its history has been shaped by recurring waves of invasion, migrations and trade, including Aryans, the Greeks under Alexander the Great, the Hephthalites (or White Huns), the Turks, Mongols, Persians, Mughals, the Portuguese and finally, the British. Key aspects of the diversity these waves have brought include religion, ethnicity and customs; social structures; population and demographics, all spread out over a vast and geographically diverse territory

India today is home to varied cultures and ethnic groups with substantial differences in physical appearance, language, religion and customs. India also has vast economic differences between regions and its richest state is c.10x more prosperous (on a per capita basis) than its poorest, with high-growth states and large metros at middle-income level resembling coastal China, and others more closely resembling Sub-Saharan Africa, with incomes under US$1,000 per capita. It is said that geography is destiny, and if this is true, then India’s land itself is a key determinant of the diversity of its peoples, varying from desert to savannah and rain forests, from the roof of the world to coastal swamps and tropical islands. This geography, coupled with major urban centres and valleys of technology clusters, shapes its inhabitants daily lives and therefore their culture and beliefs. India’s size and terrain have traditionally hindered large scale travel and communication between various parts of the country and have therefore allowed regional identities to prosper and flourish.

While ethnicity and religion form a core of each Indian’s identity, those identities themselves can vary widely depending on backgrounds, regions and socio-economic levels. Even within religions, there can be significant differences in how this is practiced and therefore how identity is defined. For example, while India is 80% Hindu, there are significant differences in how it is practiced in the north and the south of the country, and even within any given state there continue to be big differences between Hindus depending on their caste (despite the caste system having officially been abolished), their sub-sect within Hinduism and their origins within the country, to name a few.

This fundamental diversity is why, it has been difficult to tether India’s identity to any one faith, ethnic group, language or culture, despite the relative demographic dominance of Hindus. It is also the reason why from a political perspective, India has embraced inclusiveness and pluralism for all its peoples since the time of its founding. Since that time, India forged a national identity based on common values and purpose, and implemented these through a constitutional and democratic framework that instilled these values in its national frameworks. Indeed, India’s national identity, its economy, and its stability is built on this diversity and the underlying constitutional freedoms that every citizen of the country enjoys to participate in the economy and polity irrespective of the circumstances of their birth.

This diversity and the pluralism it fosters have been a key strength for India, creating a vibrant and dynamic society that is open to new ideas, and quick to adopt and adapt innovations regardless of their origin, as well as creating a strong democratic polity with checks and balances on its leadership. If properly leveraged, India’s diversity is a fundamental strategic asset for the country’s development and standing in the world. In practice though, successive governments have also exploited the country’s diversity by playing to identity politics to win votes from castes, religious minorities, regions and the poor. While America’s diversity was imported from the rest of the world in a few hundred years, India’s was built over millennia and has continued to remain diverse while also being bound by a sense of national identity. The prize of diversity is high. However, fully unlocking the value of India’s diversity will require meeting a number of political, economic and social challenges.

The Challenges of Maximising the Value of India’s Diversity

Migration flows have become a global issue and endangered embracing diversity.The world faces the challenge of diminishing resources, climate crises, rising populations, regional conflicts and accentuated differences within and across national boundaries. These have led to mass migrations flows across countries, continents and hemispheres. Political realities have been disrupted in the process and populist and mainstream politicians too have managed to galvanise the fear and dissatisfaction to win victories off the back of stopping immigration. An American president has spoken of creating a wall to stop the flow of migrants, labelling them as criminals and rapists , one of Germany’s most successful post-war leaders lost the confidence of the electorate in the aftermath of accepting over 1m refugees in the country, and the UK has voted to exit the European Union for reasons that include “taking back control of our borders” with its Prime Minister stating dissatisfaction with the idea that immigrants were “treating the country as their own”.

Whether manipulative populism is to blame or more fundamental concerns of citizens over social cohesion, border security and strained resources, immigration has risen to the top of the agenda and has deeply divided populations within countries. Acceptance of diversity has been a casualty of this phase of the world’s development.

India continues to advocate the primacy of diversity and rights and will need to go much further. India is also subject to the same pressures as the rest of the world. Specifically, it has porous borders with its neighbours, Pakistan, Bangladesh and Afghanistan, that enable significant illegal immigrant flows. While the official number of immigrants from these countries total 3m, the number of illegal immigrants from Bangladesh alone is estimated to total five times this number, at c.15m. The country has had numerous cross-border terrorist infiltrations including the attack on Indian security forces in Pulawama, Kashmir in 2019, the 2008 Mumbai terror attacks and the terror attack on the Indian parliament in 2001. In 2001, India’s parliament passed a resolution to modify India’s Citizenship Act (of 1955) in part to address these issues. The current government has recently passed a further amendment to this act that has triggered waves of protests and riots across the country from those in favour and those against. The recently passed amendment to India’s Citizenship Act provides a path to naturalisation for illegal migrants from three neighbouring Islamic countries (Pakistan, Bangladesh and Afghanistan) who have been in India prior to 2014, provided that they belonged to persecuted religious minorities in these countries, specifically naming only Hindus, Sikhs, Buddhists, Jains, Parsis and Christians.

Critics and the opposition party have argued that the act effectively discriminates against Muslims by“My government will ensure that there is complete freedom of faith and that everyone has the undeniable right to retain or adopt the religion of his or her choice without coercion … my government will not allow any religious group, belonging to the majority or the minority, to incite hatred against others, overtly or covertly.” Prime Minister Narendra Modi providing an amnesty to illegal migrants from all other major religions. They argue that the professed aim of protecting persecuted minorities does not hold up since the amendment excludes persecuted Muslim minorities in these countries (such as the Ahmadi Muslims in Pakistan, or Shia Hazaras in Afghanistan). When combined with an ongoing effort to create a National Register of Citizens (“NRC”), the fear is that the CAA could potentially be used to disenfranchise or target India’s indigenous Muslim citizens as well. Based on the current drafts of the NRC, it is expected that a significant number of Indians particularly from economically weaker sections of society, will not have the necessary paperwork to evidence their citizenship and eiligability for the register, and critics fear that the CAA could likely be a critical alternative path for the documentation of these citizen, a path that would not be open to Indian Muslims.

On the other side, its supporters have argued that the Citizenship Amendment Act (“CAA”) is a matter of border security and immigration controls aimed at providing a sanctuary for persecuted minorities“Hindus make up 80% of India’s population. Muslims, India’s largest minority at 14% of the population, worry the citizenship law will eventually be used to harass them or even call into question their citizenship.” The Wall Street Journal from neighbouring Islamic countries who have fled to India, and does not directly impact any of India’s existing 1.3bn citizens. Prime Minister Modi has long spoken forcefully on the importance of India’s culture of inclusiveness, and on his vision of a united and prosperous India, outlining the need for unity for India to realise its potential, principles that he has repeatedly re-affirmed, re-assuring Indians that the purpose of the CAA is not to be discriminate against any minorities, “… I want to clarify once again that the C.A.A. is not going to take away anybody’s citizenship. It is about giving citizenship to those facing discrimination … This Act illustrates India’s centuries old culture of acceptance, harmony, compassion and brotherhood … The law has nothing to do with Muslims who are made out of the soil of India, whose ancestors are the sons of Mother India …. Muslims of India, who have lived in this country for several generations, will not be affected by CAA or NRC."

In spite of the PM’s re-assurances, the scale and breadth of the protests against the CAA has expanded over the last month and a half, spreading to various parts of the country, driven by India’s large universities and its young students and supported by an opposition heavily defeated at the last election. Global media too has taken notice. If unresolved, the current protests and the international perceptions of the issues, have potentially significant social, political and economic consequences for the country both domestically and internationally.

Maximising the Value of Diversity for India’s Continuing Economic Rise

The economic imperative is clear.The Modi government has repeatedly stated the ambition for India to become a US$5tn economy by 2025 and in order to achieve this, the government has focused on a number of supporting policies focused around reforms that have included attacking the black economy, financial inclusion and formal banking participation for the poor, a nationwide goods and services tax, an insolvency and bankruptcy code to help restructure industry and the financial sector, the rapid buildout of physical infrastructure including roads, railways and urban metro systems, opening sectors to foreign participation and investment and a series of social efforts to encourage female participation. These reforms were successful in taking the economy to an 8.2% GDP growth rate. However, a combination of global and domestic factors has resulted in India’s economy slowing down over the last two years from over 8% to under 5% growth in the latest quarter, with employment growth and industrial sectors slowing down significantly. The key challenges facing the government today therefore are firstly, engineering a rapid recovery, and secondly, launching the next wave of structural reforms to support India’s sustainable longer-term growth.

The key principles in support of diversity and inclusion have been laid out by the Prime Minister. Clearly, avoiding internal dislocations is critical to success. However, actively maximising the value of the human capital of the nation is the best way to avoid the internal dislocation and drive the rise up the curve. This requires the government as a whole to follow through on the principles set out by the prime minister in various speeches over his leadership tenure, namely:

  1. One nation, many peoples.“Nation is one. We will not work for Hindus or Muslims, we will work for the people of India.”
  2. Diversity an advantage. “[India] has a variety of dialects, dressing styles, food habits and beliefs. Despite this diversity we have learnt from our traditions to be united for the country for its welfare.”
  3. Acceptance of differences. “Every Indian can feel proud of the fact that India has embraced every cult of the world, every tradition and every ideology in some or the other form.
  4. Peaceful co-existence. "The calm and peace maintained by 130 crore Indians in the run-up to today’s verdict manifests India’s inherent commitment to peaceful coexistence. May this very spirit of unity and togetherness power the development trajectory of our nation.”
  5. Non-malignment. “My government will not allow any religious group, belonging to the majority or the minority, to incite hatred against others, overtly or covertly.”
  6. Non-violence. “Debate, discussion and dissent are essential parts of democracy but, never has damage to public property and disturbance of normal life been a part of our ethos.”
  7. Unity.“Unity in diversity is India’s strength. There is simplicity in every Indian. There is unity in every corner of India. This is our strength.”
  8. Opportunity. “I dream of a young India that is not constrained by any limitations whatsoever. I want the youth of this country to lead a life filled with hope and opportunity.”
  9. Meritocracy.“My government’s job is good governance for everybody. My government will make policies; if you fit into it, come on board, or stay where you are. My job is not to spoon-feed anyone.”
  10. Harmony.“We must decide whether Hindus and Muslims should fight each other, or against poverty. Only peace and goodwill can take this country forward”
  11. Personal security. We talk about the safety of values in the culture. But we have to understand the values of safety as well. We have to make it a part of our life. Safety of the society is ensured if we are conscious of our own safety.”
  12. Fairness for all.“All religions and all communities have the same rights and it is my responsibility to ensure their complete and total protection. My government will not tolerate or accept any discrimination based on caste, creed and religion.”

With these words the prime minister has set a high bar to hold others as well as himself accountable to. This provides the criteria for him to judge his team, his team to judge themselves as well as for others to judge the whole team. Clearly, a free press will judge transgressions openly, harshly and real-time. India’s highly sophisticated press corps will note any action and inaction as well as reaction and hesitation. In an open democracy, the bar is a high one indeed.

The underlying drivers of the benefits of diversity and inclusion are clear and compelling.National unity and social stability, underpinned by economic and political freedom for all Indians, is a fundamental pre-requisite in achieving both the economic objectives and the wider political benefits. The key factors for the government to focus on are as follows:

  1. Domestic Social Stability is the Key to Reducing Risk and Avoiding Economic Disruption.The history of India demonstrates that accepting its many religious and cultural identities is not an option for India, it is indeed a necessity for development. Episodic clashes and violence between religious and ethnic communities, have disrupted economic progress for decades and through much of its first phase of development and at times in the second. India’s struggle against identity politics was helped by the liberalisation of its economy in the 1990s when the government’s focus shifted towards unleashing its economic potential. This shift helped usher in a period of relative social stability which allowed India to progress rapidly.
  2. Preserving Goodwill and Political Capital is Needed for Major Structural Reforms. Social stability is also critical for the continued execution of major outstanding structural reforms like land reform, privatisations, and FDI liberalisation, many of which will lead to short term dislocations and the creation of perceived ‘winners’ and ‘losers’. Prolonged anti-government protests are clearly a distraction for the government and one that saps political capital away from the reform effort. Engaging entrenched interest groups becomes more difficult in a hyper-polarised political climate where there are protests in the streets, and the perceived intentions behind reforms are seen through the lens of identity and power politics, thereby exacerbating divisions and undermining their implementation.
  3. India’s Soft Power is a Critical Factor for its Global Positioning. India’s inclusive, democratic and successively liberal capitalist model is a key driver of its soft power and has resulted in strong ties with key powers including the US, Europe, and Japan, as well as with the Middle East and others. Internal conflict and policies that are perceived as illiberal by the international community can play into the hands of detractors and create a narrative or a perception of diverging values, which in turn will reduce India’s soft power. Avoiding internal conflict therefore is critical to ensuring that this advantage is well utilised.
  4. Global Risk Perception Impacts the Foreign Capital Flows India Needs to Grow.India’s domestic savings alone cannot finance the 35-40% of GDP (or US$1 to 1.2tn per annum) it needs to invest in order to grow at 8-10% sustainably, and FDI’s share of fixed gross capital formation over the past decade has ranged from c.8% to over 30% annually. While global investment linkages into India are strong, increased risk perception could result in foreign capital stagnating or slowing down and coming at a higher cost to the Indian businesses which will be the key drivers of growth. As an example, FDI into China doubled from 1985-1988, only to remain flat in 1989 and 1990 as the international community withheld investments over concerns about risk, political stability and human rights, in the aftermath of the Tiananmen Square Protests.
  5. Capturing the Demographic Dividend Requires Widespread Inclusion. Inclusion is key to maintaining India’s robust entrepreneurial ecosystem which has enabled entrepreneurs from various religions and communities to build world-leading businesses. India’s entrepreneurs have been able to succeed and help capture India’s demographic dividend in large part because of their ability to access capital and hire based on merit, rather than religion or community. Wipro, India’s 3rd largest IT services company, founded by a Muslim, employs c.200,000 people and generates c.US$8.5bn of revenue, while the Tata Group of companies with over US$100bn of revenue, were founded and are run by a Parsi family, of Persian origins. Maintaining an inclusive entrepreneurial ecosystem is therefore critical to ensure that India can both retain and attract entrepreneurial talent.

Diversity, Demographics and Democracy

Diversity, demographics and democracy are the three key assets of India’s competitive advantage.As the populations in developed Western countries age, and China’s does too, India finds itself with 18% of its “India’s compassion and generosity despite its own poverty is the defining character of the country. The common theme – through all these migrations and cycles of invasion, occupation and liberation – has been acceptance, compassion and inclusiveness, supporting an evolution and strengthening of the Indian identity.” population between the ages of 10 and 24 compared to 12% in China and 13% in the US . Its demographic advantage is clear. Further, democracy has long proven to be correlated with successful economies . While China has shown that authoritarian models can lead to economic success, these have been the exception rather than the rule, and the jury is out as to whether that is possible if protectionist trade practices are removed and also if it is sustainable as citizens demand more opportunity. In India, democracy was long believed to be an inhibitor to growth, and it took Mr Modi’s first term as prime minister to show that the country’s problem was not democracy, but leadership, allowing democracy to take its rightful place as an asset of the country, rather than as a liability.

In addition to democracy and demographics, diversity is a key asset in India’s favour and adds another qualitative layer to propel India’s rise. India’s decision to follow a secular and pluralist approach since its inception has helped India realise a “Diversity Dividend”, which its neighbour Pakistan, which appears to strive for a religious identity and related cultural homogeneity, did not. India’s leaders in contrast have long understood the prize of openness and the current administration has taken steps to create more openness through expanding internet connections, making telecommunications cheaper so the poor can access it, driving financial inclusion, reducing red-tape and bureaucracy, and continuing currency conversion and the free flow of foreign investment returns. These are not the steps of a country closing itself, nor are they the steps of a country not understanding the value of inclusion. However, when the world hears of detention camps for repatriating illegal immigrants and the exclusion of persecuted Muslims from asylum provisions it worries that India might be following the example of China.

To unlock the full value of its diversity, the government will need a programme far beyond merely avoiding pitfalls or pandering to unmerited and unjust differences, which is part of the legacy of India’s post-Independence government, it will need to create a fully inclusive society.

The Diversity Dividend requires unlocking the value of human capital.India’s 1.3 billion population is set to rise to 1.6 billion by 2050. It will be the largest population in the world, the largest democracy, the largest workforce, the largest young population, the largest consumer population and the first power to rise in the information era. Its diversity can be a major asset and yield a Diversity Dividend and that requires the following conditions to be India’s reality:

  • A united vision for the country which every Indian, regardless of their social, cultural or religious identity, can buy in to. This means that individual community identities need to be respected but also subsumed within a bigger national identity.
  • A peaceful population that is energised and working together to maximise growth and achieve the vision. This requires the government to protect every Indian’s freedom and liberty and ensure that they are protected and safe.
  • Soft power in the world based on respected values. For the 55% of the world population that lives in liberal democracies , which tends to also be in countries that India has the strongest links to, this means they respect India for embracing democratic pluralism and diversity.
  • A trusted government that represents all citizens with a clear mandate of action. This will require resolving differences to form a broad and inclusive political coalition with minorities based on common aspirations for development and prosperity, rather than stoking fear based on religion and identity.
  • Internal security and stability which is based on domestic social stability and security from external threats. This will require quick and compassionate responses to internal threats, and an emphasis on better regional security (which will require tackling border security, cross-border terrorism and relations with neighbours) to pre-empt and avoid calls for harsh treatment of immigrants.

  • Investment in people and their skills to bring diverse segments of the population to the economy and this includes women (c.660m in India), religious minorities (c.280m), as well as economically underprivileged castes (c.230m) and tribal peoples (c.120m).
  • Peaceful resolution of division and dissent which may require a combination of patience (France’s Yellow Vest protests fizzled out after approximately four difficult months) and concession or compassion (such as the US Civil Rights Act of 1968 which helped ease the violent protests after Martin Luther King’s assassination). Force, on the other hand, has rarely led to sustainable successes in pluralist societies.

India’s precedents point to peaceful solutions. India’s history of successive migrations also provides precedents for the successful assimilation of migrants and refugees from various cultures. India’s people have learned how to accept, accommodate and assimilate other cultures and ideas, including Greek civilisation, Islamic faith, Persian esoteric practices, Sufi mysticism, Christian values, and western political ideas and technologies to emerge as a stronger and more open civilisation.

India’s ethos has led to today’s India being home to refugees from Tibet (following their exodus as China entered Tibet in 1959), from Bangladesh (following the 1971 war with Pakistan), and more recently from Sri Lanka (during its civil war), accepting displaced groups and supporting them with land and money. India’s compassion and generosity despite its own poverty is the defining character of the country. The common theme – through all these migrations and cycles of invasion, occupation and liberation – has been acceptance, compassion and inclusiveness, supporting an evolution and strengthening of the Indian identity. Countries that have failed to embrace diversity have usually paid a heavy price in terms of peace, prosperity and their position in the world. Recent examples include Northern Ireland’s sectarian violence, the reduction in the UK’s strategic scope following the Brexit referendum and the perpetual Israeli-Palestinian conflict.

In the immediate term, at this juncture, India’s government may feel unfairly maligned by the opposition, who having been soundly beaten in the last election have found a cause, and by the foreign press. However, how the current crisis is resolved will define India’s image and character for billions of people the world over who support the idea of an open compassionate India, and therefore the stakes are high for India’s leadership. Against this backdrop, India’s leaders will clearly need to resolve the current tensions in a manner consistent with its history of inclusiveness and openness.

Importantly, the PM has laid out a dozen guiding principles for how India is to develop under the government’s leadership (see above) and these provide the basis of the solution. It is time for principles first and foremost, touching the people, being magnanimous and the wily behind-the-scenes deal-making that delivered so many of the reforms that have made the government the winner of the last election. India needs to resolve the current tensions to quickly refocus its energies on the prize of maximising the value of its people and this focus will re-galvanise the leadership and the nation.

Conclusion: Unlocking the Diversity Dividend

India’s economic rise is being driven by major forces related to its people producing more young than others (demographics), moving en masse to cities (urbanisation), using the internet and technologies to overcome the challenges of their infrastructure and poverty (technology adoption), accessing formal financial systems (financial inclusion), and having the ability and wish to consume (mass consumerism). At the core of all of these drivers is people.

The government’s role is critical and various enlightened governments of India have introduced policies that promote its prosperity and do so peacefully while enhancing freedoms. The financial reforms of 1991 were an inflection point and in the ensuing years a US$1tn economy (in 2006] rose to US$2tn by 2014. The Modi government was audacious in introducing structural reforms and in five years India saw another trillion dollars added to the economy, India’s economy is now set to cross US$5tn by 2025-27 and US$10tn by 2030-2033 and can reach US$20-30tn by 2040. This represents a 7-10x increase vs. its current scale, in a space of two decades.

The critical requirement now is to put in place the factors that will drive India in the next steeper, and more difficult, part of its climb. And the key to unlocking this value is human capital; this in essence creates the Diversity Dividend. The power of democracy, demographics and diversity is India’s advantage in creating a powerful and constructive force for good in the world.


  1. Please see GPC’s February 2019 Sign of the Times, “India’s Journey to a US$5tn Economy: Growth Beyond Policy”
  2. Please see GPC’s November 2019 Sign of the Times, “India’s Rise: Growth Scenarios”
  3. Ibid
  4. See the Feb 2019 Sign of the Times:   India’s Journey to a US$5tn Economy: Growth Beyond Policy
  5. Please see GPC’s October 2018 Sign of the Times, “Transforming India’s Growth Model” and September 2018 Sign of the Times, “Reforms and Accelerating Growth are the Key to Political Power in India”
  6. Please see GPC’s September 2019 Sign of the Times, “Strenghtening India’s Growth Multiple in the Global Slowdown”
  7. Please see GPC’s March 2018 Sign of the Times, “Briefing: India-Pakistan Conflict – An Inflexion Point?” and July 2017 Sign of the Times, “Path to Power: India’s Great Opportunity in the Changing World Order”
  8. Please see GPC’s April 2018 Sign of the Times, “India’s States: Re-alignment Towards Growth”, September 2015 Sign of the Times, “Creating Growth Through its States, How India Can Become A Long Term Driver of Economic Growth” and July 2015 Sign of the Times, “India’s States: the India Within India”
  9. Source: 2015 Trump presidential candidacy announcement:
  10. The Guardian
  11. Source; 2011 Census of India
  12. Source:  Carnegie India
  13. These include the 1984 anti-Sikh riots, the 1990 Mandal Commission protests against caste-based reservation, communal violence associated with the demolition of the Babri Masjid in 1992 and the 2002 Gujarat riots
  14. Source:   Business Today, FDI is currently 8.1% of GCF
  15. Source: UN Population Statistics
  16. Source: World Economic Forum
  17. Source: Our World in Data 
  18. Based on proportion of population listed as “Scheduled Castes” and “Scheduled Tribes” in the Indian Census, 2011
  19. See appendix for definitions and sources