The Great Transformation: India’s Great Opportunity

India finds itself at a unique moment in its history. A confluence of events including a global pandemic, a heightened strategic rivalry between the US and China, a sharp failure in trust in China as a good global citizen and the relative resilience of a rapidly rising Asia during the current crisis, have all come together to create this moment. India’s structural rise has been unfolding in three phases, starting with a long haul from poverty over 50 years post-independence, through economic liberalisation over a period of c.12 years and more recently its rise to global significance1. At this time last year, the Indian economy was poised to grow exponentially and cross US$3 trillion in 2020, US$5 trillion by 2025 and US$10 trillion by 2030 with a freshly re-elected Narendra Modi determined to lead India’s rapid rise in global significance as it took its place alongside the US and China as a leading global economic superpower. A lot has changed in the past year. Prior to the onset of the coronavirus pandemic, India’s growth had slowed to c.4% as a result of both international factors, such as the US-China trade war, and domestic ones, such as a domestic liquidity crisis; and reform momentum seemed to pause in part due to an amendment to the country’s citizenship laws triggering large nationwide protests in January. Despite these challenges, the Indian economy at the beginning of 2020 appeared to be on the road to a recovery with full year growth expected to accelerate to c.7%2.

The unfolding coronavirus pandemic has caused social, political and economic disruptions that are set to impact both India’s trajectory and more fundamentally the global order within which India was poised to rise. America, the incumbent superpower, and China, its main rival, have both faltered and are unable to lead the world, albeit for very different reasons. Other major powers and blocs including Europe and Russia have faltered politically and economically, while East Asian countries have demonstrated resilience. India acted early and decisively to contain the spread, and thereby defied expectations by limiting casualties to achieve among the lowest mortality rates globally to date. These measures met the goal of maximising the number of lives saved, at the cost of the economy. India’s GDP is expected to contract by (4.5%) in 20203 (from previous estimates of 5.8% in January and 1.9% in April4 ) while the global economy is expected to contract to by (c.5)% this year, with the US and the Eurozone each declining by (8)% and over (10)%, respectively5.

The pandemic and the resulting economic pressures have ruthlessly exposed the flaws in the global order and the systems that uphold it; models of health, education, industrial policy, trade and global supply chains have all been tested and found wanting, in need of reform and reinvention. At the same time though, the pandemic has also highlighted the world’s potential to execute rapid transformation, with unprecedented levels of mass collective actions which impacted taken-for-granted freedoms, the nature of work, industrial models and even the nature of capitalism. These steps point the way to a potential ‘Great Transformation’ to a viable solution to how people can live on the planet in a more peaceful, prosperous, free and sustainable way, a solution that is both compassionate and pragmatic in managing global relations, the global economy the environment, and other global commons.

For India, this inflection point represents a once in a generation opportunity to drive its own transformation that will place it among the global leaders in a post COVID-19 world. This transformation will require both radical economic openness to promote economic development as well as a focus on sustainability, social justice and human rights to ensure societal development. The decisions that India’s leaders take in the coming months will be critical in this regard, as they will not only shape India’s trajectory out of the pandemic and the ensuing economic crisis but also set the roadmap for priority initiatives that will underpin India’s rise and cement its position as a future global superpower. This month’s Sign of the Times looks at India’s opportunity to fundamentally re-architect the country for a rapid rise and strategic repositioning.


Context – India’s Position Before the Pandemic

As highlighted in previous Signs of the Times, India’s growth since 1960 has not unfolded uniformly, but has taken place in the context of distinct growth phases, namely:

  • Phase I: Hardship and Poverty (1947-2006), which corresponds roughly to the long and often flat journey of India’s GDP to US$1 trillion, marked by hardship and poverty and an average annual growth rate of c.4%.
  • Phase II: Economic Liberalisation and Participation (2007-2019), from the inflection point and rise that took India’s GDP to c.US$3bn, marked by economic liberalisation and participation, with an average annual growth rate of 7.3%.
  • Phase III: Rise to Global Significant (2020-), which marks India’s on-going rise to global significance as GDP rises to US$5 trillion and beyond, with potential average annual growth rates of 8%.

At the start of 2020, India was entering Phase III, and was well positioned to leverage five fundamental factors driving its growth, mostly independent of government policy: (a) favourable demographics, (b) large-scale urbanisation, (c) mass-scale technology adoption, (d) mass consumption and (e) financial inclusion – to scale the size of its economy to US$5 trillion by 2024. A combination of internal and external macro events (including the US-China trade dispute, a domestic banking crisis, and a slowdown in investment) resulted in a sharp dip in India’s growth with GDP growth in 2020 forecast to fall to 5.8% (prior to the onset of the coronavirus pandemic)7 . This slowdown notwithstanding, India was still expected to return to c.7-8% growth levels in the medium-term and achieve its US$5 trillion GDP target (albeit one to two years later than originally forecast).


The Impact of the Pandemic on India and the World

The pandemic has revealed unavoidable truths about the global order, and countries’ resilience

With c.500,000 deaths registered globally (and a total death toll based on overall fatalities estimated to be up to 60% higher) and a c.US$5 trillion impact on world GDP, the pandemic has exacted a heavy human and economic toll, particularly for some countries, and in the process, revealed some unavoidable truths8 about the lack of leadership and resilience in major global economies, the impact of entrenched political agendas and the superpower leadership vacuum in the international arena.

There are significant differences between countries: while some have taken decisive and efficient actions to minimise deaths from the virus and the collateral damage to the economy, others have not and as a result have suffered much higher fatalities and large outbreaks, combined with a much more significant economic impact (see chart).

The pandemic has revealed some uncomfortable truths about the current state of global leadership. The United States, following an ‘America First’ agenda, appears increasingly insular when it comes to major global issues, further rolling back its support of key multilateral institutions including the World Health Organisation and NATO. The government response to the pandemic has been uneven at best and the recent wave of social unrest and protest across the country following the death of George Floyd – potentially the United States’ own ‘Arab Spring’ moment – has further eroded its ability to lead the world through the crisis. China, on the other hand, which had deliberately and successfully advanced for years into the vacuum being created by the United States, has also faced a widespread international backlash due to the delays and manner in which it disseminated information about the virus to the rest of the world, as well as a failed communications and public relations campaign which has seen its stature diminished.


India has suffered a major outbreak, though early and decisive actions helped slow the spread significantly

India had focused on what people might hope from the country that gave the world Mahatma Gandhi: saving its people. And this was in stark contrast to what many expected from a nationalist government and a leader like Prime Minister Modi. It was also in stark contrast to what populist leaders did around the world in America, the UK, Brazil and Russia, all of whom seemed to not learn the lessons of the smart early movers and presided over massive deaths at home.

India suffered a major outbreak and reported c.560,000 confirmed coronavirus cases, of which c.60% have recovered, and c.16,500 deaths to date9 . While India’s caseload is now the fourth highest in the world after the United States, Brazil and Russia, India’s fatality rate (as a percentage of total confirmed cases) is significantly lower than most other major countries. Given the scale of the country, among other factors, there have been valid questions over the accuracy of the count in a country of 1.3 billion, but some simple maths helps: to arrive at the relative death rate of say the UK or America, India would need to have missed c.500,000 to 900,000 deaths. Given India’s highly active press, independent institutional machinery, and a highly participative democracy all of which seek out and bring to light failures , the chances of completely missing such a massive discrepancy in the death toll is low. So, relative to its large population, India has among the lowest mortality rates, suggesting that its efforts to date to contain the virus have been relatively successful.

What India Got Right. The Indian government’s decision to act quickly and decisively in March was effective and played an important role in containing India’s case and death count. The key positives emerging from India’s response to the pandemic include:

  • Decision to Lockdown the Country Early. The government’s decision to impose a nationwide lockdown for c.3 months is estimated to have saved up to 78,000 lives, while reducing India’s case count by up to 2.9m11
  • Strength of India’s Federal System. Recognising that outbreaks are a (multi-) local phenomena, the central government allowed individual state governments to formulate tailored responses to the pandemic. As a result, large and populous states like Karnataka and Andhra Pradesh have successfully curtailed new cases and deaths.
  • Ability to Ramp Up Surge Capacity. In the face of adversity, India has demonstrated its ability to ramp up production of protective equipment (and is now the second largest manufacturer of PPE in the world) and low-cost ventilators and in the process helped ease the burden on an already stretched healthcare infrastructure.
  • Economic Stimulus Measures Announced. The government, in conjunction with the Reserve Bank of India announced a US$266bn stimulus package (c.10% of GDP) focused on providing relief to key at-risk sectors including micro, small and medium enterprises (“MSME”) and agriculture.

Key Challenges that Remain. Despite these successes, India’s fight against the coronavirus pandemic is far from over. Key challenges that the country needs to overcome include:

  • Sustained Increase in Case Count. While the growth in new coronavirus cases in the country has slowed, the country still continues to add over 15,000 new cases per day. As lockdown restrictions are eased across the country in the coming weeks, reducing this number is likely to be even more challenging, particularly in its dense urban areas.
  • Strained Healthcare Infrastructure. As highlighted in previous papers from the Sign of the Times, India’s healthcare infrastructure is well below global standards; as case numbers continue to increase, the demand for already limited beds, doctors and ventilators is likely to continue to increase.12
  • Shortage of Migrant Labour in Cities. Over the last three months, it is estimated that there was an exodus of up to at least 600,000 migrant workers from India’s large cities and industrial towns13. These workers (many of who endured great personal hardship) may find it difficult to return to urban centres due to sustained travel restrictions, and as such, there could be a shortage of labour across key industries like construction and real estate in the near-term.

Simply letting the virus grow out of control, uncontrolled herd immunity, is clearly not an option for India given the size of its population. Early estimates suggested that India could have been looking at 3-9 million deaths due to the coronavirus pandemic by September 2020… the early decisive actions of the government may well have saved millions of lives.Prior to the lockdown, early estimates of the potential contagion’s impact suggested that India could expect as many 100-300 million detected COVID-19 cases by September 2020 in a ‘baseline’ scenario if it had failed to make any interventions14, which based on India’s current mortality rate of c.3% (of confirmed cases), would suggest that India could have been looking at 3-9 million deaths due to COVID-19 by this September. While India’s early actions have helped to stave off this catastrophic scenario, the threat has however not yet passed, and India will need to act quickly in case infection rates begin to rise again as they have in many other parts of the world. This will require not only addressing the outstanding challenges laid out above but also of course continuing to do and even accelerating further the things that it has been doing right. If this estimate of potential death count is even remotely credible, the early actions of the government may well have saved millions of lives already and its continuing focus may keep that so. For any country that cares about the value of human life, there may be few greater things to do.


While the loss of lives has been contained (so far), the loss of livelihoods has been severe

Stepping back, the Indian government’s response to the virus has helped save hundreds of thousands if not millions of lives, thus far. On the flip side, the livelihood of hundreds of millions has been adversely impacted. In the immediate aftermath of the lockdown being imposed, the unemployment rate in the country surged to c.27% (for comparison, the US unemployment rate increased to c.15% in April). Incredibly, this number has subsequently come back down to close to pre-coronavirus levels at c.10% (while the US. which never went into such a severe lockdown remains at c.13% in May), though output across India’s industrial, manufacturing and services sectors remain in contraction territory.15 While most countries have accepted the contraction forecast by the IMF as a cost of the pandemic, India’s GDP contraction of nearly 5% in 2020, is one that a country with 370m living in poverty16 cannot accept. The challenge is particularly difficult given the country’s three most prosperous states – Maharashtra, Tamil Nadu, and Delhi – continue to account for a majority of all new coronavirus cases and deaths and are more disabled from making their contribution.

While growth is expected to recover to 6.0% in 202117, India’s economic growth trajectory has likely been set back by two years relative to previous estimates of its phased trajectory18. If the government hopes to make up for lost time and steer the country towards its US$5 trillion GDP target over the near to medium term, it will need to act with similar speed and decisiveness as it showed in containing the virus. This will require the development and execution of a roadmap that rapidly restarts India’s stalled economic engine as it continues to emerge from lockdown, while also transforming India to succeed in a post lockdown global economic and political order.


Seizing the Moment: The Roadmap to Transformation

While more mature countries are focused on whether they can kick start the economies, India’s unique opportunity, at its simplest level, lies in whether it can use the crisis to build momentum for sustained and fundamental change, developing and growing its economy while repositioning politically and securing goodwill of the international community towards an aspiring India. So, in the short-term, India must kick-start the economy and in parallel, initiate an ambitious plan for the long-term repositioning of the country both economically and politically.


Phase I: Restarting India’s Economic Engine

India’s deeply held values require a priority on minimising the loss of life. Given the potential speed with which the virus spreads unchecked and the massive death toll it potentially produces, this means India (and any country that shares its goal of minimising casualties) will need to adopt a war-time mentality to successfully contain and eventually defeat this virus.19 In parallel though, the government’s efforts must also focus on rapidly reviving the economy, lest lives are saved at the cost of countless livelihoods, prolonged suffering, and ultimately other lives lost from unintended consequences.

This twin challenge facing all national leaders are particularly substantial for India given its demographic challenges (with urban density c.3x of the US, c.60% of the population living below the poverty line and uninsured, and 457m people suffering from the neglected diseases of poverty)20. This requires a multi-pronged strategy with three key elements:

  1. Make the Economy Safe to Operate In. This requires central and state governments to work together with industry leaders to ensure that workplaces across the country are safe to operate in. Important health and sanitation measures like social distancing, the use of PPE and the enforcement of workplace capacity limits need to be enforced with the same rigour that was in evidence in the streets in the last many months. India has tested over 8 million people21, however this is only 1/15th that of the United States (which is not the benchmark on this) and needs to be increased substantially in the coming months22.
    Enduring asset: Establishes an essential model of federal, state and industry collaboration.
  2. Financial Stabilisation. Given credit growth in the Indian economy has declined from to c.6% in the most recent fiscal year (from c.13% the previous year)23, the government and RBI may need to re-work monetary and fiscal policy in order to inject liquidity in the system and subsequently incentivise banks and non-banking financial services companies (“NBFCs”) to disburse credit to large and small enterprises. Additionally, the government will need to focus on the seamless execution of previously announced stimulus initiatives (including collateral-free loans to MSMEs and liquidity to farmers). Enduring asset: Establishes mechanism for driving the flow of credit in an economy that suffers from severe blockages.
  3. Re-Purpose India’s Labour Force. Millions of migrant workers have returned to their (rural) hometowns and need to be incentivised to return to urban India so the country can leverage this critical workforce to restart the economy, for example through direct benefits pay-outs to urban bank branches to incentivise ’re-migration’ and set up new accounts to further drive inclusion; or leverage them to drive productivity in rural-centric agriculture and MSME sectors. The focus must be on retraining both skilled and unskilled at-risk workers for resilient and strategic growth sectors by providing incentives to employers such as infrastructure, manufacturing for blue collar labour, and healthcare and technology for white collar employees. Enduring asset: Enhances mass financial inclusion and migrates employment for the longer term to key sectors.

In addition to restarting the economy’s engine, India (along with many other countries) also needs to put in place an contingency plan for a virus worst case scenario, where the virus spreads too quickly into the community in mass urban centres and existing lockdown and containment protocols fail to contain it. Such a plan would include quarantines and cordon sanitaires, superscaled emergency medical facilities (of the type the government has announced in Delhi), stocks of emergency food and emergency cash reserves.


Phase II: Transforming India for the Post-Pandemic World

The Pandemic as Oracle: The Great Transformation Revealed

The coronavirus pandemic has caused global-scale political, economic and social disruptions that have exposed the unaddressed flawsThe pandemic has changed the world by showing what is possible and where the world is migrating to. It is unclear whether this pivotal foresight will result in fundamental change in conservative western societies. In young, developing and aspiring nations the blueprint for the future is now clear and they have the energy to change, and far less to lose. in the systems that have supported the liberal world order. The world’s systems of trade, healthcare, education, industry and international cooperation have been proven beyond a reasonable doubt to be inadequate and insufficiently resilient to deal with the challenges facing the planet in the 21st century. At the same time, the crisis, and the varied responses enacted, have also shown glimpses of what a more robust and sustainable world, or at least elements of it, might look like. The pandemic response has, in particular, revealed the level of mass mobilisation that can be achieved in societies, the mass levels of capital that can be drawn upon (or created) to address issues deemed sufficiently urgent and the mass alignment that can be achieved in societies being asked to suspend rights that were previously considered inviolable.

At its most fundamental level, the coronavirus pandemic has created a moment in time where incremental change-resistant mindsets can be broken and the social contract can be rewritten to perhaps create a more prosperous, equitable and sustainable future. And it therefore provides a finite window that governments can use to make changes that were impossible to make before. As they emerge from the pandemic, the world’s powers can learn the critical lessons from the crisis and forge a new global order through a ‘Great Transformation’, one that not only can handle and, where possible, pre-empt future crises but also addresses global issues such as economic inequality, climate change and sustainability24. The elements of this Great Transformation outlined in the Sign of the Times, ‘The World Emerging from this Crisis’, June 202025, would include:

  1. The Regeneration of the Environment. Leading to a cleaner more sustainable environment, powered by cleaner energies (Illustrative Metric: 8% reduction in carbon emissions in 2020, the largest annual reduction in history)
  2. Global Digital Participation. Leading to a fully inclusive global communications platform driven by universal and affordable access (Illustrative Metric: 25-30% increase in global data traffic, with no drop in speed and uptime)
  3. Remote Working. Leading a majority of industries becoming virtual, enhanced by productivity and communications tools (Illustrative Metric: Up to 35% of employee globally working remotely)
  4. Digital Education. Leading to better education outcomes through universal access to affordable high-quality education (Illustrative Metric: c.700m students learning remotely and online due to school closures)
  5. Digital Payments and Financial Inclusion. Leading to global financial inclusion driven by universal adoption of digital payments and fintech tools (Illustrative Metric: 133% increase in new customers added by PayPal)
  6. Resilient Healthcare and Social Security Systems. Leading to better health outcomes, a higher quality of life and better preparedness for future disruptions through a focus on whole systems resilience (Illustrative Metric: 45% of the US population is under-insured from a healthcare perspective)
  7. Responsible Capitalism. Leading to a step change in how business is conducted, with companies focusing on profits, the environment and society based on their citizenship and impact (Illustrative Metric: 5-10% outperformance by companies with higher ESG26 standards and multi-stakeholder approaches)
  8. Urbanisation. Leading to more liveable and sustainable cities, with a higher quality of life, and more non-urban working (Illustrative Metric: >50% reduction in time spent at offices and retail across major cities)
  9. Eradication of Infectious Diseases. Leading to fast and cost-efficient breakthrough solutions to major health threats (Illustrative Metric: 12-18-month target timeline to get COVID-19 vaccine to market vs. over a decade for earlier vaccines)
  10. Mass Capital for Mass Problems. Leading to significantly increased and coordinated spending to address major issues of national and international importance (Illustrative Metric: US$8 trillion of economic stimulus packages, equivalent to c.6% of world GDP, announced to date)

A sustainable end state at the conclusion of The Great Transformation also requires the development and global adoption of a cleanThe pandemic has revealed the characteristics of ‘The Great Transformation’ which are now clear themes and trends towards the next civilisation whose societies are built on more sustainable values … those that cling to the industrial carbon era model that served the world well in the last civilisation are less likely to be the future world leaders. cheap and renewable energy source to power the world, as well as a new resource set to replace insufficient natural resources. Without these, the journey along the Great Transformation can only go so far. Taken together however, these themes and the end state provide a clear roadmap towards the next civilisation whose societies are built on more sustainable values. They are critical to creating societies that are more resilient in being more future proof than those that cling to the industrial carbon era model that served the world well in the last civilisation. Doing so will require systems level change across national and international institutions, industries and people, as well as innovation to facilitate the transition away from the status quo. To take financial services as an example, The Great Transformation will require an industry (i) that is increasingly mobile, flexible, and coordinated to address global challenges, (ii) in which new business models built around ‘conscious’ capital, enhanced ESG systems and increasing positive impact for good, and (iii) which draws upon innovations like cyber currencies, green bonds, and sustainable stock exchanges to meet its objectives.

Future world leaders will be those that embrace this future across all aspects of their nations and the international landscape. The question of course remains as to whether the world is ready to embark on such a massive transformation. The coronavirus pandemic has the potential to be an inflection point for this decision, but its lessons may also be forgotten (or even never learned in the first place by some). Clearly some countries will quicker than others accepting the need for the Great Transformation and proactively managing the transition.

India, given its size and scale, has an opportunity to become a world leader by being the first to architect its future based on these characteristics and showing the way for others. China by comparison gained much from its scale, although it was the that last country to emerge as a global industrial giant, and with a waning Western liberal order, it was able to position to be a superpower. That position may be short-lived for numerous reasons, mainly because of the rivalry with the incumbent US superpower, where both vie for power as industrial giants. That is a war for the past. India’s opportunity comes from the fight to be the first country to emerge as a superpower of the future, in the world about to be created by The Great Transformation.


The Philosophy, Principles and Realpolitik of Change: Why India Must Open Up as the World Erects Barriers

Simply put, for India to lead it must not just catch-up with the rest of the world, it must do something quite different. India today lags advancedAmerica and China’s fight for industrial supremacy is a war for the past. India’s opportunity comes from the fight to be the first country to emerge as a superpower of the future, in the world about to be created by The Great Transformation. industrialised economies in terms of nearly every economic and social indicator, in some cases by a significant margin. While in some cases this presents an opportunity for India, not bound by legacy systems and infrastructure, to leapfrog the West with next generation solutions, in many other cases the gaps must be filled the hard way. In both scenarios, however, this will require a radical agenda to transform and grow the economy. For India in particular the best way to achieve that is to leverage its fundamental growth drivers – demographics and mass in urbanisation, technology adoption, consumption and financial inclusion – to drive its growth beyond 8% with a desire to play a leadership role in championing the transformation for the rest of the world in the aftermath of the pandemic27.

While these drivers exist largely independent of government policy, unlocking their full potential will require the mass application of capital, entrepreneurship and resources on an unprecedented scale that can only be achieved by India working with the rest of the world, in an India Wide Open strategy28. Every civilisation has a philosophical backbone that provides it with its guiding principles and these together with its values define its modus operandi.

The Philosophy and Principles of Openness in making the transition for India to the future comprise five essential aspects:

  1. Open People: Unlocking Human Potential. This requires structural, cultural, legal and in particular, educational and skills, changes to increase formal employment, the quality of employment, and female participation to allow India to fully capitalise on its demographic dividend ultimately addressing the role of people in a post-industrial society.
  2. Open Government: Creating a Modern Transparent Meritocracy. This requires creating an efficient, transparent, and meritocratic government that sees its role as a steward of the common good(s) and of equitable development in creating a truly open, free and fair society, facilitating efficient deregulation and liberalisation, privatisation, and checking excesses and injustices to create sustainable and fair growth and spread of the value of that growth.
  3. Open Resources: Securing the Resources for Growth. This requires fully tapping India’s reserve of resources through the industrialisation of agriculture and strategic natural resource development, particularly in India’s Northeast and Western states, but more importantly, securing the next generation of resources beyond the carbon-based ones that built the current civilisation.
  4. Open to Entrepreneurs: Democratising Entrepreneurship. This requires the creation of a broad-based system of enterprise that enables mass entrepreneurship to flourish across the vast country to unlock economic participation by leveraging information, technology, and knowledge.
  5. Open to the World: Full Engagement and Leverage of the World into India. This requires the recognition that India’s success comes from leveraging talent from all across the world by providing them a partner with 1.3 billion people living in a peaceful, vibrant society that welcomes them and the policies that allow India to become a hub for multiple global industries and people.

There is no road map for transitioning to this level of openness and no one to follow. No government in a democracy of great size has ever managed this level and rate of change, so India will need to be the path finder and that means it will need to innovate to find the solution as well as borrow and adapt ideas from leading thinkers, companies, research institutes, universities and think tanks, to create its own blueprint. In terms of execution it is not an option to imagine that one can micro-manage this level of change, so much of India Wide Open will need to be managed bottom up, by local governments, industry and individuals, with the central leadership setting the philosophy and the rules of engagement for others to act and focus on a few big things that catalyse and give confidence.

The overarching philosophy for India must Much like China did in the waning industrial world order, India will need to solicit the rest of the world to trade, invest and participate in its growth as the largest global wealth creation opportunity of a generation as it builds a society that is fit for The Great the creation of an India that is confident and wide open to its people unlocking their potential and the world participating in that to the full. Such an approach is both neo-liberal in nature and universally inclusive, offering economic opportunity to all, caring for the weakest in society and highly protective of individual human rights and dignity. India’s open and confident embrace of its democracy and pluralism will be key to its success given the global change in values that will be a product of The Great Transformation.

The Realpolitik of Power Blocs determines where India can position. Much like China did in the waning industrial world order, India will need to solicit the rest of the world to trade, invest and participate in its growth as the largest global wealth creation opportunity of a generation as it builds a society that is fit for The Great Transformation. It is perhaps ironic that that path for India requires it to open up just as the rest of the world appears to be erecting barriers. The growing impact of trade wars, the withdrawal of US world leadership in addressing major issues from climate change to the pandemic, and the inability of China or the EU to fill the void, the increasing struggle of multi-lateral institutions (from NATO to the WHO), and the increasing success of National Populism that espouses isolationism are all leading to a global breakdown in collaboration and trust that was most recently demonstrated in the world’s inability to coordinate an effective response to the coronavirus, but also in current efforts on climate change, security and other longer term challenges.

However, it is important to consider that the current trajectory of global decoupling is a transient one. In fact, The Great Transformation will come with greater, rather than less global cooperation, and there are a few indications of what future power blocs and global alliances might look like as a result (some of them more or less inevitable given demographics and economics). These include among others the importance of:

  1. The Quadrilateral Global Power Blocs comprising the United States, China, India and (in some form) the EU, whose relationships will shape global trade, economics and politics;
  2. The Regional ‘Quad’ of the US, India, Japan and Australia as potential guarantors of security in the Indo-Pacific region, and;
  3. China’s Pacific and Eurasian Sphere of Influence based on economic incentives and increasing military weight (barring further breakdowns in the country’s trust and credibility).
  4. The Global Information and Technology Super League transcending national boundaries and definitions, comprising leading global information and technology companies with strategic assets and dominant positions in critical technologies, with American companies today occupying the dominant spaces, Chinese companies jockeying for position and India companies emerging to stake their claims.

By taking the ‘contrarian’ view today to the closed protective and insular nation states that National Populists are erecting across the world as they fight for yesterday’s industrial and natural resource assets, by embracing openness, India can gain a first mover advantage in positioning within or alongside these future economic, regional, and virtual power blocs, in some cases exerting influence over their creation and direction and increasing the likelihood of creating long term blocs favourable to its interests. Further, adopting an open policy provides India with a unique opportunity to amass soft power in a world where others are seeing theirs dwindling. Given today’s global leadership vacuum, India has a window to step in and promote or champion solutions to the world’s biggest problems, focusing on global initiatives that promote peace prosperity and freedom, and building coalitions to reform and revitalise major global institutions for continued relevance in the new world order.

Such an India would truly emerge as a superpower in own right, one with a new model that is built on multi-dimensional influence and credibility rather than (just on) economic and military might. This superpower will be very different to the one represented by China, which appears to be hardening its foreign policy stances and engagements, and encountering increasing international push-back as a result29. An Indian superpower with international credibility could, if it wished, do much to help China regain the trust it has lost and take its place as a positive global citizen in the world, with immense implications for global relations.


Five Priorities for India in Setting the Transformation Trajectory

It is against this historic shift in the civilisation of the world and the realpolitik of that change that India’s own transformation strategy must be formulated.

Among the many interlinked and long-term objectives that India will need to have, five are critical as near term priorities that set the trajectory for India’s development and turn India into the platform from which further and more ambitious goals can be successfully pursued. These include the following:


A Model for the Transition to the Future

Executing a Great Transformation-like transition to the future would undoubtedly be the most complex and ambitious undertaking of and government. Given that world over leaders will find reasons not to do so, India may be uniquely placed given its disadvantages (such as infrastructure, poverty, healthcare, education levels, formal jobs) to present this as a way to solve and deliver a great leap forward into the future.

The pre-requisite is to first fully embrace and internalise the principles of full and total openness as a core tenant of future policy, as part of its aim to deliver on values and goals of the preservation of life, the protection of human dignity and political, economic and social opportunity for all its people, It would also need to formulate a long-term geopolitical strategy based on the shape of future global power blocs and India’s place within them. Both the tenant and the strategy are critical inputs shaping execution and timing of the five priority actions for India in the near-term, which themselves serve as a catalysts and drivers of the longer-term changes of the Great Transformation.

The priority actions in the near term (and the policies related to the Great Transformation over the longer term) necessitate a different execution model and resources than India’s government has in place today. Key elements include: (1) An overarching body to champion and steer the programme as a whole. Given the scale and the importance of the transition this body will clearly need to be led by the prime minister himself and include the senior-most cabinet members and selected experts and policy advisors, (2) The restructuring of each ministry into separate divisions with their own resources and reporting, one focusing exclusively on the priority actions to deliver the future and the other executing traditional ministerial business, and (3). The bifurcation of future focus and managing today will need to be applied to the civil service bureaucracy as a whole.


The Pandemic as an Inflection Point: India’s Potential Growth Trajectories

Can the Indian government execute the level of change required to capitalise on this unique moment? China’s economic success has for two decades been thought of as a product of its authoritarian centralised regime. The maths of China’s rise across its three phases maps almost perfectly onto India’s39, which conventional wisdom held to be constrained by democracy. The difference was due to factors such as when reforms began, urbanisation and consumerism, rather than the political system. The pandemic provides India with the opportunity to make changes that would otherwise have been deemed impossible. Although the level of change required is daunting, the Modi government has defied expectations on a number of occasions in the past, achieving breakthrough reforms that many believed to be impossible or at least not politically feasible, all things being considered (see the sidebar).

The dislocations of the coronavirus pandemic provide a finite window of opportunity for bold leaders to achieve unprecedented breakthroughs. In the coming months, India’s leadership will need to achieve several such breakthroughs to firstly rapidly revive the economy, and secondly to position India to grow rapidly in the post-coronavirus world by capitalising on the major transformations that the pandemic is causing.

India’s government faces a fork in the road. One path is to seek to grow the country with the aim of catching up with the world, much along the path trodden by China, to become an economic power competing with China with its democracy and openness, but essentially an Industrial Age power. The other path is to embrace ‘The Great Transformation’ and transform itself as the pioneer co-opting the world to create the first country to pass into the next more sustainable Information Age. These two potential paths that India’s development might take have radically different degrees of economic, social and political impact on India, its position in the world and the world too:

  1. Path I: Stabilisation, Reforms and a Return to ‘Normal’. Cyclical Recovery to 7-8% in Medium-Term, 6-7% Average GDP Growth in Long-Term, c.150m Taken out of Poverty40, Environment-Negative.

    Description. Along this path, exhausted by its battle against the coronavirus and the economic impact of the lockdown, India seeks to return the economy to its pre-pandemic ‘normal’ as soon as possible, addressing key short term challenges and making a number of potentially critical reforms, in the areas of finance, labour and land. However, more radical steps are hindered by a world that is more competitive and protectionist abroad and one that continues to see resistance to change at home, so India cannot fully capitalise on its potential and thereby limits both the degree of its domestic economic, social and environmental transformation and its own global position.

    Economic Impact. The economy shrinks by c.5% in 2020, returning to its pre-pandemic level by late 2021, a year of transition when the pandemic is brought under control globally. Growth accelerates up to c.7-8% in the medium-term due to the impact of reforms, stabilising over the longer term at c.6-7% on average while continuing to be vulnerable to cyclical boom and bust cycles, attracting investors as the ‘next big thing’ and losing some of them in the downturns.

    Social Impact. Given the long-term compounding effect of growth, India’s poverty rate reduces from c.22% to c.9% by 2040 and the middle class expands to c.600m people, creating substantial overall prosperity, but still leaving a substantial portion of the population, nearly 1bn people, behind.

    Environmental Impact. This path has India seeking to rise as an Industrial Age power competing with China and other East Asian countries, and so its development leaves an ever-growing environmental footprint.

    Global Impact and Position. India rises in global significance as an increasingly important geopolitical and economic player, albeit as one among many in an increasingly unstable world.

  2. Path II: India Embraces the Great Transformation. 10%+ Accelerated GDP Growth, c.250m Taken out of Poverty, 1 billion Move out of Low-Income Category41, Environment-Positive with Ever-Multiplying Impact.

    Description. Along this more radical path, India fully embraces the major transformations made clear during the pandemic and leverages the moment to fundamentally re-architect the country for rapid growth, embracing an unprecedented level of openness, thereby charting a new trajectory, and successfully re-positioning itself as the most attractive destination globally for industry, trade, innovation and entrepreneurship, attracting exponentially growing amounts of international capital, creating the foundation for two decades of stable and high growth.

    Economic Impact. The damage to the economy from the crisis is contained and GDP stays flat for 2020 as a whole. Thereafter, the economy accelerates in 2021, a year of transition, with GDP growth accelerating further and eventually peaking at c.12% by 2023 as the logic and scale of India’s transformative strategy becomes evident and settling into a 10% average growth rate over the next two decades with increasing investment and productivity.

    Social Impact. India all but eliminates extreme poverty by 2040, with the poverty rate reducing to 3% by 2040, and India’s global middle class expands to over 1 billion people.

    Environmental Impact. India embraces the future and the Great Transformation, driving its economy to be an exemplary leader in its efforts to create sustainable solutions for the Information Age, thereby significantly reducing the negative externalities from its economic growth.

    Global Impact and Position. Despite ongoing and significant global changes and dislocations, India manages to grow at 10%+ over a long period, generating substantial employment in the rest of the world and becoming a beacon of light in a world struggling to come out of the dark of the end days of the industrial era.

India’s economic trajectory over the next 20 years in these three scenarios looks very different.

Clearly, embracing ‘The Great Transformation’ allows India to become a major geo-economic, geo-political and geo-social force. In this scenario, India has the potential not only to grow faster and become far more prosperous – with a potential incremental GDP of c.US$2.6 trillion by 2030 and US$13.3 trillion by 2040 vs. the first scenario – but also to address the critical issues which have long held it back from achieving its full potential. Successfully implementing Scenario II would for example lift c.250 million people out of extreme poverty and nearly eliminate it within the next two decades, while providing an exponentially higher level prosperity to all of India’s 1.6 billion people by 2040, with a billion people moving from low-income category (spending less than c.US$10 per day) to the global middle class42.



The world continues to grapple with a pandemic that has exposed the division and flaws of leading nations, especially those led by National Populists, stalled what seemed like the unerring geopolitical rise of China and left the world leaderless as America struggles with its own divisions and issues. The pandemic has also showed the world what the future could look like and the way to turn the suffering into a more environmentally sustainable and equitable future.

India, facing the biggest global crisis and economic dislocation in its independent history, finds itself at a pivotal moment. Its stage of development, lack of critical healthcare infrastructure and poverty gives it a near term challenge far greater than any other nation. While, thus far, its leaders have been decisive in preventing the worst loss of life, a misstep in the opening up of the country could risk devastating India’s population with a deaths in the millions, economically setting its trajectory back by many years. However, the pandemic also provides a unique window of opportunity for India to rapidly transform and re-architect the country for rapid and sustainable growth.

The life-threatening nature of a crisis of this magnitude provides India The life-threatening nature of a crisis of this magnitude provides India with the opportunity to enact major changes that would have been politically impossible a few months ago. with the opportunity to enact major changes that would have been politically impossible a few months ago. The vast array of changes required within the framework described in this paper can either be introduced one by one, in which case it will be likely impossible, or by adopting a ‘systems change’ approach which seeks to fundamentally re-architect the institutional mechanisms that allows the changes to occur in a bottom up fashion.

The most powerful ingredient in making a radical change is one that is perfectly suited to a democracy: the individual. And it is even more powerful given India has 1.3 billion of them. The Modi government’s success in driving financial inclusion provides a good example of what such an approach could looks like: it used its unique ID system to introduce over 300 million people into the financial system. However, launching five major initiatives and the hundreds of sub-initiatives to make those effective is a challenge beyond any government, anywhere in the world. The answer is to change the system itself. Systems change, in the Indian context, becomes very possible if it is based on an end objective of unlocking the value of the individual in every aspect of the system through mass inclusion: financial, healthcare, education, digital, work place inclusion.

India has an opportunity to lead the world through ‘The Great Transformation’ to the next civilisation. To succeed India needs to co-opt the world to India’s cause which is one that the world will also face: transitioning from an industrial society to one that is far more sustainable and equitable. At some point, the politics of division in major countries, spearheaded by National Populists in the West, will need to give way to something more unified, domestically and internationally. India is well suited to lead this change based on its historic values, from bare necessity and from the fact that it is a democracy that values and trusts the individual to decide the most important things. It is the most logical thing to do.


  1. See the February 2019 Sign of the Times, “India’s Journey to a US$5 trillion Economy: Growth Beyond Policy”
  2. Source: IMF World Economic Outlook, October 2019 estimate
  3. Source: IMF World Economic Outlook, June 2020 Update
  4. Source: IMF World Economic Outlook, April 2020 estimate
  5. Source: IMF World Economic Outlook, June 2020 Update
  6. See the February 2019 Sign of the Times, “India’s Journey to a US$5 trillion Economy: Growth Beyond Policy”
  7. Source: IMF World Economic Outlook, Jan-2020 Update
  8. See the June 2020 Sign of the Times: “The Coronavirus Pandemic Part III: The World Emerging from this Crisis”
  9. Source: Government of India; as of June 29,2020
  10. For example, the state of Maharashtra last month added c.1,000 deaths to its reported total due to pressure from local opposition parties about certain deaths due to co-morbidities not being reported as COVID-19 deaths; Source: Hindustan Times
  11. Source: Government of India study by the Ministry of Statistics and Program Implementation, and the Indian Statistical Institute
  12. See the April 2020 Sign of the Times: “The Coronavirus Pandemic Part I: A Global Test of Resilience, Leadership and Values”
  13. Source: Economist, based on a government estimates; other anecdotal media accounts have suggested millions migrant workers leaving the cities during the pandemic
  14. Source: Center for Disease Dynamics, Economics and Policy (CDDEP) and Johns Hopkins estimates, excludes estimated asymptomatic and undetected cases; 
  15. Source: Centre for Monitoring Indian Economy
  16. Global Multidimensional Poverty Index 2019, UNDP
  17. Source: IMF World Economic Outlook, June 2020 Update
  18. See November 2019 Sign of the Times: “India’s Rise: Growth Scenarios”
  19. See the May 2020 Sign of the Times: “The Coronavirus Pandemic Part II: Waging the War”
  20. See the May 2020 Sign of the Times: “The Coronavirus Pandemic Part I: A Global Test of Resilience, Leadership and Values”
  21. Source: 
  22. Source: Centre for Global Development
  23. Source: Business Standard
  24. See the June 2020 Sign of the Times: “The Coronavirus Pandemic Part III: The World Emerging from this Crisis”
  25. ibid
  26. Environmental, Social and Governance
  27. ibid
  28. See the February 2012 Sign of the Times: “India Wide Open: Transforming India Now for 2040”
  29. Source: How the World Is Responding to a Changing China, Carnegie Endowment for International Peace, June 2020
  30. Source: Capital IQ
  31. Source: Bain & Co
  32. Source: Mape Advisory
  33. Source: “Vietnam’s future digital economy – Towards 2030 and 2045”, CSIRO
  34. Source: IE CGC 2019 Sovereign Wealth Funds Report
  35. Source: IMF
  36. Source: RBI
  37. Source: Annual reports of the UN and World Bank
  38. Source: World Trade Organisation
  39. See the April 2019 Sign of the Times: “India’s Growth: Critical Turning Points and Geostrategic Implications”; refer to the comparison of Indiand China’s GDP trajectories across their three phases in Figure 2
  40. There are approximately 300m Indians (c.22% of its population) living in poverty (Source: UN Human Development Report; poverty reduction estimates based on following assumptions: (i) estimated income share of bottom 20% of the population (Source: World Inequality Database), Scenario I assumes this share stays constant at current level, Scenario II: 0.5% increase; Scenario III: 2.0% increase; (ii) 4% annual increase in poverty line (inflation); (iii) even distribution of income amongst bottom 20% of population
  41. While India has a large and rapidly-growing middle class, 90% of the country’s population (c.1.2bn people) lived on an average income of less than c.INR190,000 as of 2015 (Source: World Inequality Database;, which would translate to c.US$10 per day in 2020 based on GDP growth rates; global and leading Indian think tanks define the “middle class” as those spending more than US$10 per day per person (Sources: Brookings, Economist, NCAER); based on various estimates, the number of Indians above this threshold could increase from c.140m in 2020 (10% of population) to c.330m by 2030 (22% of population), c.610m by 2040 (38% of population) and c.1.0bn by 2050 (60% of population) (Source: Center for Global Development, GPC Analysis); these estimates and similar ones from other sources (Bain, McKinsey) are based on India achieving 6-8% average growth rates over the next 2-3 decades; based on GPC’s analysis, if India can sustain average growth rates of 10% assumed in Scenario III, the number of people in India’s middle class could increase to 1.0bn by 2040 or earlier
  42. Ibid