Surjit Bhalla: Viksit Bharat may hinge on deeper economic ties with the world’s most vibrant free market

Subscribe to enjoy similar stories. There are two basic elements to any successful development strategy: growth and redistribution. Over the last decade, the Narendra Modi government has been very successful with policies of redistribution.

Indeed, India’s record on inclusive growth has likely been among the best in the world. On economic growth, however, the record is not good. India is the fastest growing major economy in the world, and unlike some, I believe Indian data accurately reflect the underlying reality.

So what is the problem with annual growth at around 7.8% for the last five years? Growth has occurred via robust expansion of infrastructure investment. Both private investment and net foreign direct investment (FDI) have been depressingly low; net FDI as a proportion of GDP is the same as last observed in 1990 and private investment is 10 percentage points lower than its peak around 2010. Both are in the doldrums because of a bad climate for private investment.

This is where the real mother of all trade deals comes into play. I am talking about the India-US rather than the stepmotherly India-EU deal. Our trade deal with the EU is welcome, like those with the UK and Australia, but the real Enchilada is the India-US agreement.

One of many indicators of the relative importance of a US deal: in constant dollar terms, the joint contribution of India and the US to world growth is the same as China’s; India’s is 10%, the US’s 24% and China’s 34%. (The EU’s share is also 10 %.) Geopolitics and geo-economics both suggest that our choice in the new G-2 world is to partner either with the US (with which we have a lot in common, starting with democracy) or with China-Russia. The US across all dimensions is the most open