Bernstein recently put out a research on India. What this well made research document shows is how little the world understands about India. And that ignorance is exactly what will fuel India’s century.
Let me address each of the six key points:
1) India’s 10–15 million IT/BPO workforce now sit directly in the path of Gen AI. Will the next decade create engineers or drivers and delivery workers?
Maths is not an opinion. Absolute nos mean nothing. We have to understand the context. 15 million in a country of 1500 million is 1%. If the IT/BPO industry were to die tomorrow, it will do more harm to the customers than to the suppliers. Second, it is not about engineers or delivery workers. It is about ALL. The composition of the ecosystem is a function of various parameters – all moving rapidly. India is a young country with frugal lifestyles. People understand the young but ignore the frugal. And that makes all the difference.
2) Agriculture is frozen in a 1970s policy loop. ~45% of the workforce, ~15% of GDP. Small landholdings. Monsoon dependence. Subsidy-heavy politics.
Agriculture is about food security and India is doing a pretty good job on that front. Most Indians are on a plant based whole food diet. That avoids ultra processed foods. The 45% figure is probably incorrect. Percentage of GDP is irrelevant. What is important is self sufficiency.
3) AI: Consumer vs Creator. India runs on global tech but owns no frontier AI model. Data centers alone are not a strategy.
Owning models, compute, and platforms is.
AI is irrelevant and inconsequential at present to the India story. Ai is really a fancy dress competition that India does not have the capital to participate in. Anyone who understands India knows that neither semiconductors nor data centres are going to be viable in India. The cost of capital is too high in comparison to the cost of transport.
4) Manufacturing is still ~16–17% of GDP. India keeps entering industries after supply chains are already locked.
Chinese style manufacturing or American style bigtech is not India’s cup of tea. But there are many other things that China or USA cannot beat India in. Holistic health, religious tourism, contract research, frugal innovation. There is no one right as far as development paradigms go.
5) State-level cash transfers (especially targeted schemes for women) now run into ₹1.7–2.5 trillion annually.
These are a bit hilarious. Things politicians do to buy votes. But then there are far bigger jokers in global politics. It is an affordable waste. It does help the poor though and that is important.
6) R&D: At ~0.6–0.7% of GDP, spending doesn’t match India’s semiconductor or AI ambitions.
India cannot succeed in these sectors. The lower the better.
What is important is our orientation ? And India is making rapid progress on getting that right.