I note with some surprise that since Risk Watchdog launched last July, I have never dedicated a post to India. Therefore, I see no better time than the beginning of India’s mammoth general elections to address this shortcoming.

Lest anyone forget, India is the largest democracy on Earth, and along with China, one of two emerging market giants that are supposed to shift wealth and power away from the West and towards the East.

Now is not the time for me to address whether China or India will be bigger or better than the other by 2050. That discussion will have to wait another time. However, I will say that as of 2009, China seems to have stolen a big lead over India not only in absolute GDP, per capita GDP and GDP growth terms, but in areas such as infrastructure and manufacturing. India has excelled in other fields, but has not yet had the same global impact as China.

One possible reason for this is that China has a much stronger and more stable government than India. This obviously makes it easier for the government to implement policies in China than in India, where the government consists of a shaky coalition – and will surely continue to do so, post-election. However, China’s undemocratic system is also accused of suppressing pent-up unrest (potentially leading to an explosion at a later date) and creativity. Thus, the jury is still out as regards the road to 2050.

The Main Issues In Focus

• The economy: As with every government in the world, India’s ruling Congress Party and its allies will need to demonstrate their economic credentials amid the global recession. Despite its strong domestic sector, India is not immune. But rapid growth in itself is not enough. At the last election, the then-ruling Hindu-nationalist Bharatiya Janata Party (BJP) was kicked out by voters, despite delivering rapid growth, because this had failed to trickle down to the poor. Going forward, whoever wins needs to ensure that rapid growth is felt by the wider population. Failure to do so could eventually lead to a backlash against reforms.

• Security: Last year’s Mumbai terror attacks demonstrated that India remains a dangerous place for both locals and foreign businesses. The BJP in particular has accused Congress of weakness vis-à-vis Pakistan, from where the attacks were allegedly planned (though not by the government). However, the BJP’s attempts to exploit the attacks backfired severely. But regardless of who wins, there will be limits to how tough India can be towards Pakistan. Too many aggressive measures could lead to a limited confrontation, which would hurt both countries.

• Secular versus religious: The BJP is an openly religious (Hindu) party, whereas Congress is secular. Thus, a BJP victory could increase tensions between India’s majority Hindus and its substantial Muslim minority (I say ‘minority’ but they number 150 million people!).

• Foreign policy: Although India has moved closer to the US over the past decade, significant elements – primarily left-wing parties that hold the balance of power – remain anti-American. This could make it harder for New Delhi to emerge as a reliable ally of Washington. Also, a weak government would leave India less able to shape events in the Indian Ocean, which is emerging as a major arena of Great Power competition.