The world needs a new economic motor. Could India fit the bill?

THE WORLD could use more economic hope. The war in Ukraine has dealt a heavy blow to global growth prospects. Lockdowns and a property slowdown have sapped China, the erstwhile growth engine, of its vim. Given its size and potential, it seems reasonable to ask if India could be the world’s next economic motor. In April the IMF reckoned that Indian GDP might grow by more than 8% this year—easily the fastest pace among large countries. Such a rapid expansion, if sustained, would have a profound impact on the world. But, in large part because of the shifting structure of the global economy, things are not as simple as India taking up China’s mantle.

In the 2000s China accounted for nearly a third of global growth—more than America and the European Union combined—adding new productive capacity, each year, equivalent to the present-day output of Austria. By the 2010s China’s contribution had roughly doubled, such that each year of expansion was worth an additional Switzerland. From the turn of the millennium to the eve of the pandemic, China grew into the largest consumer of most of the world’s major commodities, and its share of global goods exports rose from 4% to 13%.