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The Economics Show
Martin Wolf talks to Arvind Subramanian: India, the next economic superpower?
Jan 27, 2025
Arvind Subramanian, former chief economic advisor to the Indian government, shares insights on India's economic ambitions. He critiques the government's investment climate, expressing concern about potential currency crises. The discussion highlights the challenges India faces in achieving high-income status by 2047 amidst declining investments and inadequate reforms. Subramanian emphasizes the importance of export-led growth and addresses the complex relationship between exchange rates and financial stability, questioning the sustainability of India's rapid growth trajectory.
30:40
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Quick takeaways
- India's aspiration to become an economic superpower by 2047 faces challenges from declining private investment and mismanaged currency policy.
- The rise of illiberalism under Modi's government threatens democratic norms and could hinder India's global ambitions despite its demographic advantages.
Deep dives
Current Economic Challenges
India's economy has experienced a significant slowdown following a brief period of robust recovery from the pandemic. Key issues now include declining private investment and a drop in global foreign direct investment (FDI), all suggesting a waning confidence in the government's economic management. The central bank's approach to exchange rate management has created complications, as it moved towards a fixed exchange rate that is now difficult to sustain amidst shifting global conditions. The Reserve Bank of India's substantial currency defense has led to tighter monetary policy at a time when the economy needed the opposite, complicating prospects for recovery.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode