Why Is India Still Poor?

India was literally the richest region in the world for almost 2000 years, all the way from when Jesus was born until the British colonized them. It kick started agriculture in the era of the Egyptians, defended their land against Alexander the Great, exchanged knowledge with the middle east in the Islamic Golden Era and traded with the Europeans, though the latter proved to be the start of its downfall.
At first the relationship with the Portuguese seemed to be quite amicable with both countries benefitting from it, the Portuguese received rare spices to be sold back in Europe at 60x the cost of the whole voyage while the Indians received protection from the Muslims forces coming from the west and goods from various parts of Africa. And while it’s safe to say that the Europeans benefited the most from this exchange, at least they didn’t try to completely overcome the country… for the first decades that is.
Because in 1757, one of the many kingdoms and empires in the Indian region started to rebel and a civil war broke out. The British, saw this as an opportunity to expand their power in the region by siding with one of the sides and well, it worked, the British East India Company elected a puppet for the throne of Bengal and started a century long conquest of the Indian subcontinent. The small independent kingdoms in the region didn’t have many options, the British used the method known as divide and conquer to completely stop any attempt of organization and revolution from the locals. This eventually led to the British becoming too powerful and kicking out all the other European nations present at the time.
NOKIA had a huge factory in the south of the region, which employed 8000 workers and in the beginning was described as a success story that proved India was ready to be part of the world economy, but this honeymoon phase didn’t last for long, when in 2014 the Indian government, known for its tough burocracy demanded $1.5B in taxes from the Finnish company. This dispute was shared all over the world and raised some red flags for international companies thinking about having a shot in India. And even though the dispute was settled with NOKIA paying $200M in taxes the harm was already done, within the following years other companies like Vodafone, Carn Energy and 17 other multinationals all had to dispute alleged debt in taxes to the Indian government which for no apparent reason demanded billions of dollars from them.
So it has become clear now that India, like China, has to adopt a more capitalist strategy, just like the East Asian Tigers, opening up their borders, reducing burocracy when starting new businesses and allowing for natural selection to happen instead of just wasting dollars in dying companies. But that’s not to say that things aren’t looking good for this amazing nation. India has a much younger and faster growing population than China, which will ensure there’s no shortage of labour in the next few decades, their exports are growing every year, being third in the world in export growth behind Vietnam and China and because they have plenty of universities and smart young minds, the innovation in the country is booming, with apps like Udaan which help small businesses to buy and sell products much more efficiently and to a larger public, seeing that they no longer have to deal with transportation and multiple suppliers.
India might not become the new China as many people speculate, but that’s okay, they are still on track to surpassing the US GDP by 2050, they will have the largest population by the same year and as long as the government follows the steps of other success stories in East Asia it’s just a matter of time until India becomes a major player in the world trade just like they were in the past. Have you heard about the new African superpower? Drop a like if you liked it, subs if you loved it and thanks for watching it. Obrigado!

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Select video clips courtesy of Pexels