India's GDP is now greater than the UK

O

Oscurito

My old school atlas from the late 1970s devoted two pages to world trade and one statistic always struck my juvenile mind as being particularly startling: that the 3.4 million people of the Republic of Ireland exported more than roughly 700 million Indians - the former selling roughly 2.8bn US dollars worth whilst the latter could only manage 2.4bn.

Of course, I was later to learn that exports aren't the be-all and end-all when it comes to measuring a country's wealth. For example, a large domestic economy can mean that exports understate it. However, the ROI was hardly a stellar performer in those bygone days and I wondered how desperate economic conditions must have been in the sub-continent if it sold less to the rest of the world than a country with less than one-twohundredth of its population. For the record, the UK was tipping along nicely exporting about 16 times that of the RoI as the population ratio would have suggested.

At that stage, India was slowly emerging from a long period of stagnation post-independence - the so-called Hindu rate of growth. The tight statist control and planned economy implemented by Pandit Nehru and his successors meant that GDP increased by only 3.5% per annum between the 1950s and the 1980s. For a European or North American economy, that would have been a very healthy rate of expansion but for a desperately poor country like India, it was little short of disastrous.

Now, all is changed - changed utterly. A rising middle class in India became increasingly impatient with the impositions and corruption of the babus (officious civil servant types) and started to increasingly vote for parties in favour of economic liberalisation. It's no coincidence that the rise of the right-wing Bharatiya Janata Party (BJP) coincided with an unprecedented 25 year long boom in Indian economic fortunes that is still on-going - to the extent that in the last few months, India's gross domestic product has now surpassed that of the UK - four years ahead of the most optimistic predictions.

Of course, some of this is due to the decline in sterling because of the Brexit vote but this not artificial. An economy's worth derives in part from its future prospects and the decline in sterling reflects that.

So, for the first time in centuries, India's economy is now larger than that of the old colonial master - Great Britain. And the next time a British representative meets his/her Indian counterpart to discuss trade and economic matters, the one bearing the greater riches (and hence power) will be the Indian one. And with a growth rate far in excess of the UK, that gap will only grow and grow.

Forbes: India's Economy Surpasses That Of Great Britain
 
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Ruadh

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Nice OP.

There were doubts whether India had left it to late to make the jump since automation and robots would prevent the shift of low cost work to India from China; work that was hotly contested by many lower down the value chain countries. Good for them if they can pull it off.
 

devoutcapitalist

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If India further embraces free market economics and free trade they will prosper during the 21st century.
 

between the bridges

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Wow...
 

Karloff

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The Indians are a spiritual people - historically the Hindus did not invade other lands thirsty for power and greed as much as all their neighbours - and they come from an ancient civilisation.

To be a cut throat capitalist exploiter takes a kind of imperialist mindset and the best at the game come from those kinds of cultures - to assume that everything should be yours, to never say enough is enough, to pollute any land on your way to a greater profit - to twist laws to suit your own personal ascension. To inflict violence for greed only.
 
O

Oscurito

Nice OP.

There were doubts whether India had left it to late to make the jump since automation and robots would prevent the shift of low cost work to India from China; work that was hotly contested by many lower down the value chain countries. Good for them if they can pull it off.
India is now a lot more than a place where low-cost manufacturing takes place. Some major world names (Tata, HCL, Infosys, Wipro etc.) are Indian and are the ones who are bringing investment to other counties - including Ireland.

The comparison with China is interesting. China has certainly been the better performer in terms of GDP growth but after a certain point, tightly planned economies tend to hit a ceiling and need liberalisation (political as well as economic) in order to progress further.

India doesn't face that problem: China does.
 

Happycamping

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Oscurito: Have a look at a book called The Elephant & the Dragon if this is an area that interests you.
 
O

Oscurito

Oscurito: Have a look at a book called The Elephant & the Dragon if this is an area that interests you.
Thanks, I've googled it. Unless, there's been a revised edition, it's original publication date of 2007 might mean that it's not as current as one would like.
 

gleeful

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Interesting point about exports. The UK and Indian economies are roughly the same size as measured in USD. But the UK exports much more - 460 bln vs 270 for India.

Both countries have huge trade deficits. Each year the UK imports more than it exports to the tune of 10% of Gdp. Indias trade deficit is smaller, ~5% of Gdp.

Both try hard to close the trade gap but cant seem to manage it, relying each year on foreign cash.
 

Dame_Enda

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It is but divide it between 1.5 billion people and its still a poverty stricken country. Half the population doesnt have sanitation. The caste-system is also a major barrier to social mobility.
 

silverharp

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It is but divide it between 1.5 billion people and its still a poverty stricken country. Half the population doesnt have sanitation. The caste-system is also a major barrier to social mobility.
shhh! that the future model for Europe , import a billion third worlders and Europe gets its own caste system, but the GDP will be mighty
 

Ardillaun

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Depressing stat that mainly illustrates the population explosion in developing countries. Europe, brace yourselves.
 
O

Oscurito

It is but divide it between 1.5 billion people and its still a poverty stricken country. Half the population doesnt have sanitation. The caste-system is also a major barrier to social mobility.
India's population is between 12 billion and 1.3 billion.

Obviously, it is still a much poorer country but in terms of world power, it's not GDP per capita that counts: it's GDP.

Read this and you'll see how the power balance has shifted.
This surpasso has three important implications. First, it highlights India’s arrival on the global stage and a significant change in power dynamics between India and the west. The effects of this are already being witnessed in India’s repudiation of a trade deal with the UK, where it stood firm in its ask for more favorable immigration for Indian nationals. Another example is the failure of May to secure a meeting with the Tata Group, who has 4,000 British employees at a steel plant in Port Talbot, that could potentially be shut down. Second it should give India the ability to shed any residual notion of colonial inferiority and enable it to have a more open mindset and look at alternative nations to emulate.
 

Happycamping

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Thanks, I've googled it. Unless, there's been a revised edition, it's original publication date of 2007 might mean that it's not as current as one would like.
I wouldn't dismiss it. What you are seeing now hasn't been a product of only the last 10 years.
 

mossyman

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Good OP and good to see India doing better. Do you know how open India is to trade at the moment?
 
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Ardillaun

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India's population is between 12 billion and 1.3 billion.

Obviously, it is still a much poorer country but in terms of world power, it's not GDP per capita that counts: it's GDP.

Read this and you'll see how the power balance has shifted.
More awful news and the reason why these 'leaders' in developing countries don't care about the damage a huge dose of extra people will do to the planet.
 

mossyman

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Another surprising thing is that their unemployment rate is only 5 percent. Of course half the people are working in agriculture but still it's surprising in a country with such over population.
 


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