Major Political & Economic Trends in India

Instructor: Christopher Muscato

Chris has a master's degree in history and teaches at the University of Northern Colorado.

India has experienced a lot of change over the last few decades. In this lesson, we'll check out India today and examine the major economic and politics trends that have shaped its development.

Changes in India

There's a lot of change in the world today. Nobody can deny that. However, change looks different in different places. For some people, the actual, daily implications of these changes are negligible; the average person's life is often not really affected by changes around the world. India is not one of those places!

When economists try to predict the future of our increasingly globalized world, one of the first places they look is India. Culturally, economically, and politically, India has been in a constant state of adaptation and change over the last several decades. It has bent to market demands, reacted to new technologies, and been shaped by the demands of its citizens. So, what does India look like now?

Economic Trends in India

Let's start by examining India's economy. India is the archetype of industrially developing nations in the world right now, finally nearing the end of a cycle of both industrialization that began decades ago and a transition to a truly open market economy that began in the 1990s. For a long time, India's government practiced strong economic regulation, but the move towards an open market has placed them at the center of many global economic changes.

GDP of India from 1950-2010; notice any trends?
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So, what has this actually meant for India? The country currently has one of, if not the, fastest growing economies in the world! Economists predict that by 2025 it could have one of the top five largest economies in the world, as well as one of the most globalized economies. A large part of this transition has come from a gradual transition from a service-based economy to one that is driven by industry and production. This has been especially true since the Made in India Initiative took off in 2014 to boost domestic production. In short, India's making a lot of stuff and it's paying off.

Of course, India has also been working to incorporate itself into newer industries, such as technology development and digital technologies. India has a very high rate of technology startups, and the government has sponsored the Digital India Initiative to support widening India's digital infrastructure and services.

Trends in Indian Politics

India's economic developments are directly tied to the country's politics developments, and specifically the maturation of democracy in India. Again, India's government has a history of being a strong regulatory force, both in the economy and Indian society. Since about 1990, more efforts have been made to increase transparency and the electoral process, and today India is seen as a stable, albeit imperfect, democracy.

President Obama addresses the Indian Parliament in 2010
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A lot of India's politics today are focused on continuing to modernize and industrialize the nation. Higher wages and more jobs have yielded higher tax revenue for the government, and lots of that money has gone to infrastructure. Since roughly 2015, infrastructure projects have brought electricity to over 15,000 of India's small and very remote villages, and connected thousands of homes to roads and transportation routes. This is helping to correct a disparity that existed for decades in India as the cities developed, where remote areas were too-often ignored and remained isolated from national economic and transportation networks.

For foreigners who are interested in Indian politics and economy, it's important to note that a lot of India's growth has come from foreign investment. India's government worked hard to encourage foreign businesses and governments to invest in India's development, and for the foreseeable future this doesn't seem likely to change. India's government remains pretty friendly to those who want to put their money into the nation, and is laying the groundwork to be recognized as an equal among industrialized (and notably Western) powers.

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