29 Comments
Apr 1, 2022Liked by Noah Smith

Thank you for this interview, Noah. It's terrific.

Expand full comment
Apr 1, 2022·edited Apr 1, 2022Liked by Noah Smith

Is there a potential quick win available from liberalizing the textile and apparel sector?

Milton Friedman wrote decades ago about the costs of protecting Indian handloom weavers (certain products, like saris, can't legally be made on mechanized looms) and yet these and other restrictive practices are still in place.

India's apparel exports are lower by value than Bangladesh's even though India has eight times the population, so clearly something needs to change.

Expand full comment
Apr 1, 2022Liked by Noah Smith

Wow what an Interview !!! Really opened my eye to the cons of India . I think I was stuck in Echo chambers about India's Greatness . Some things that I really wish you had asked about India was headwinds related to climate change , monsoon dependency , white skin insecurity , and bad geography and natural resource crunch that are persistent affecting India's Rise!!

Expand full comment

Quality post.

BTW I think the Big Taiwan strategy is a great idea. Even if you got started in just one state - Uttar Pradesh is like ten times the population of Taiwan.

Expand full comment
Apr 1, 2022·edited Apr 1, 2022

The interview has virtually no discussion about the elephant in the room, agriculture and farmers. India is perhaps unique in history in that the vast mass of the agrarian workforce (large farmers, tenants and laborers), the *entire* rural society got the right to vote well before urbanization. And for 75 years, this electorate has been telling its leaders, 'we value stability over growth'.

With this context, it is not hard to see why low cost manufacturing, which basically depends on vulnerable labor displaced from agriculture has struggled to take off in India. It also explains why the non-elites in India agitate over everything from affirmative action to economic policies, but have been lukewarm to education. For the agrarian classes that make up the bulk of the population, education is a useful investment only it propels a son (recently daughter as well) straight into the stratosphere of a government or a corporate job.

This also ties in with what will be India's principal contribution to geopolitics. The export of food. India, despite its relatively small farm sizes, low levels of technology, poor supply chains and refusal to monetize bovines is among the largest exporters of food in the world. Barring catastrophic climate change, this role will only grow in the coming decades.

Expand full comment
Apr 1, 2022Liked by Noah Smith

Excellent interview. You really brought out a great overview of the Indian economy. I remain puzzled, though, as to why low-skill-absorbing manufacturing cannot take off like it has done in (culturally similar) Bangladesh. AS says "path dependence" but that just begs the question. Also, as Cesar Hidalgo research has shown, manufacturing's success in development may be due the ease with which it spreads to similar products (drones and watches overlap with smartphones in parts and assembly skills). I think software, even though its classified as a "service" not manufacturing, has similarly "thick" adjacencies in the product space. India may well be the key test to see if this works - if its development spreads and generates secondary, lower-skilled, employment.

Expand full comment
Apr 1, 2022·edited Apr 1, 2022Liked by Noah Smith

Really fascinating discussion.

I'm curious how the disease burden in India impacts development, curious if anyone has quantified it. I know the government pursues a few basic measures for mosquito control-- would love to see Indian research teams leading the way on moonshots for mosquito eradication or clean water or pollution control. (Maybe they are? Would love to read more if so.)

Expand full comment
Apr 1, 2022Liked by Noah Smith

I recently arrived in Chennai and was just thinking I'd like to read a general overview of India's economic history. Then this showed up in my inbox. What are the chances!

Expand full comment
Apr 1, 2022Liked by Noah Smith

Great post. Reminds me a lot with Indonesia. Very very similar.

Expand full comment

Quite an informative summary. 🙏

Expand full comment

Digital india is making everything exponential. People who don't understand tech underestimate it a lot. India will have 500 unicorns soon and they will penetrate into every possible industry they can. This will also create a huge manufacturing sector. Clean energy is the biggest area US can help india with. Reduction of oil import bill will be fundamental for india.

Expand full comment

reading such marvelous piece of article and that too from one of my most favorite economist , thoroughly enjoyed it.

Expand full comment

A truly insightful interview; thank you, Noah

Expand full comment

Superb interview: great questions in scope & span that allowed Arvind to paint a rich canvas of Indian economic development these last 3-4 decades, peppered with some truly insightful well-reasoned arguments

Expand full comment

Do people have any suggested reading on Modi, the (sign+magnitude) of impact he has had, and expectations of his future in Indian leadership?

Expand full comment