I just returned from Dubai. I was amazed at how an arid land, as it once was, has been converted into an international hub—a city throbbing with activity and ever-expanding, with an Emirati population of around 2,55,000, representing less than 12 percent of the total population. The transformation, driven by its policies that welcome investment and make it a safe haven, is phenomenal.
Within the Arab world, Abu Dhabi, Saudi Arabia, and others are fast modernising their economies. They are now developing education hubs, embracing technology, leveraging the wealth generated by oil and gas to attract investment, and transforming their economies in a changing and challenging global environment. Dubai, without oil as a resource, has achieved this.
On the other hand, the enormous strides China has made in the last 35 to 40 years are mind-boggling. There was a time in the 1980s when both the Indian and Chinese economies were lagging and part of the less developed world. Today, China is, without doubt, in contention for global leadership. Though the slowdown in their real estate sector and the decline in domestic consumption have negatively impacted their growth, investments in technology and innovation across sectors will catapult China to a leadership position in the world.
The rare earth minerals they possess, necessary for vital sectors of the global economy, give them the leverage they use strategically to withstand the challenges posed by US President Donald Trump as he seeks to transform the global economic order. The US, in the near future, will have to reach a settlement with China on its terms of trade, including the extent of the tariffs to be imposed and a quid pro quo for rare earth minerals.
A trip to China makes you marvel at the pace of its economic growth. They are decades ahead of us on all fronts.
I used the UAE and China examples to contrast them with our own country, reflecting on the years the BJP has been in power since 1998. It is quite clear that they had enough time to take bold decisions during this period. The Congress was running a coalition government for 10 years. In contrast, Prime Minister Narendra Modi, with a brute majority, had enough time to transform the economy if his intent was to truly make India ‘Atmanirbhar’. But look at where we are.
In 2023-2024, China overtook the US to become India’s top trading partner, and imports from China rose to $101 billion. India relies heavily on Chinese imports for critical industrial raw materials and intermediate goods, including telecommunications hardware and pharmaceutical raw materials. India imported electronic components worth $12 billion from China. Sixty percent of solar equipment is supplied by China to India.
China’s technology continues to influence India’s digital landscape. Chinese smartphone manufacturers dominate the Indian market, having over 75 percent market share. India’s emerging sectors, such as electric vehicles, are heavily dependent on Chinese battery technology and components. As of 2020, 18 unicorn companies in India had over $3,500 million in Chinese investments.
Obviously, China has the capacity to leverage its economic heft over India for political gain. This is apart from the fact that the Chinese have occupied our territory in Ladakh and continue to build infrastructure, making it difficult to ensure the restoration of the status quo ante. Yet this government continues to blame the Congress party, despite the fact that over the last 25 years, it has been in power for more than 14 years.
The reason why India is in dire economic straits is that the BJP’s focus is only on retaining power through means fair or foul, capturing institutions to do its bidding, and influencing minds through the media to propagate a divisive political agenda that is advantageous to it, but disastrous for the nation.
The recent terrorist attack in Pahalgam, where we were the victims, has not won us many friends. Even though delegations representing various political parties reached out to the rest of the world, we did not find a single country blaming Pakistan for what happened in Pahalgam. On the contrary, Pakistan’s Army Chief Asim Munir was hosted by Trump for lunch in Washington, and Saudi Arabia executed a defence agreement with Pakistan. This clearly suggests that our diplomatic manoeuvres have not secured the support we expected from the international community.
In the neighbourhood, we are being hemmed in by China. This, along with China’s open support to Pakistan, has put us in a very precarious situation from the standpoint of our defence. The recent US policy decision to sanction Russian companies that supply oil to Reliance has made the situation even more delicate. Trump’s constant outbursts about the fact that he was responsible for the ceasefire between India and Pakistan and that Prime Minister Modi ‘reported’ to him that India would no longer be buying oil from Russian companies by the end of 2025, especially in the absence of a categorical response from our Prime Minister, gives an indication that
we have no manoeuvrability in striking a deal with the US in respect of high tariffs imposed by them.
The only thing going for us is that we do have an FTA with the UK, and the European Union is keen to negotiate and finalise an FTA with us. We should use this opportunity to enter into similar FTAs with the rest of the Western world to open our economy and allow our entrepreneurs to compete globally in sectors we can afford to open.
It is, however, imperative that the focus of this government’s policy shifts away from divisive politics to truly build a future for our nation.
In the new world order, AI technology and skills are the future. India is a laggard in these areas. ‘Viksit Bharat’ is a pipe dream. What we need, in the immediate future, is a ‘Shikshit Bharat’, not a ‘divisive Bharat’; a Bharat that needs governance with sincerity; a Bharat not for selling dreams but being rooted in the reality of our times to uplift the millions who continue to be in poverty. This is a Bharat that Modi has failed to build since he came to power.
Kapil Sibal | Senior lawyer and member of Rajya Sabha
(Views are personal)
(Tweets @KapilSibal)
