Review: For India, ‘Our Time Has Come’

The rise of India dates to 1991, when a coalition government led by the Congress Party “inherited an economy on the ropes,” as Ms. Ayres puts it. The country was so broke that it had to sell its gold reserves to stay solvent. “Pawning the nation’s treasure in distress,” she says, “represented the decisive failure of the goal of self-reliance” so cherished by Jawaharlal Nehru, India’s first prime minister. Nehru was democratic in almost all matters but the economic, a sphere in which he was an avowed socialist. So much so that he was unabashed to borrow language from Lenin to describe his conviction that the best place for government was at the “commanding heights” of the economy.

The nadir in ’91 led India’s government to wake up and smell catastrophe. It took drastic steps in July of that year to revive the economy, including the abolition of a suffocating licensing regime. The dismantling of trade barriers, Ms. Ayres tells us, “marked India’s economic reentry to the world, and of the world to India,” even as the country remained faithful for another decade and a half to its principle of external nonalignment. This neurotic autonomy in international relations, which she describes as Nehru’s “unique philosophical legacy,” has now given way to “multi-alignment,” a word that describes New Delhi’s notable willingness to form strategic partnerships that serve its interests.

Ms. Ayres, always lucid and erudite, is at her best in her analysis of India’s foreign policy. Nonalignment, she says, was an external version of swaraj, or self-rule, the one-word motto of India’s independence movement: Postcolonial India wouldn’t take dictation from anyone, whether at home or abroad. In practice, this meant that India remained closed to alliances with the West, and with the United States in particular, during the Cold War, even as its socialist pretensions pushed it into Moscow’s orbit. Nonalignment yielded a notably anti-Western compound when combined with India’s “persistent suspicion of foreign capital,” which Ms. Ayres explains by urging us to recall that “the colonization of India by the British began commercially, with the East India Company.”

PHOTO: WSJ

Yet India and the U.S. have always been politically harmonious in important ways. India is the world’s largest democracy—Ms. Ayres calls it “a living laboratory for politics”—and “is not a revisionist power seeking to overturn the global liberal order.” This last is a point worth stressing, it being a source of comfort to Washington at a time when China appears hell-bent on replacing the Pax Americana with its own version of a global order. What India wants, Ms. Ayres argues, is comparatively modest: the respect that befits a country that will soon overtake China as the world’s most populous and edge past France and Britain to become the fifth largest economy. Permanent membership of the United Nations Security Council would be right and proper, and Ms. Ayres feels that Washington should “make good on [its] promise” of such U.N. status for India.

“We are,” she writes of India, “witnessing a country chart its course to power, and explicitly seeking not to displace others” as it does so. In other words, a rising India doesn’t threaten America’s primacy and indeed could serve as a powerful partner if the bilateral relationship is tended well. Ms. Ayres is careful to stress that the U.S. mustn’t expect—at least not in the near future—an alliance with India of the sort that it has with Japan. India remains prickly about being anyone’s “ally,” a vestige of nonalignment. But there is a bipartisan consensus in both countries—Republican and Democrat in the U.S., BJP and Congress in India—that the two share far too many interests to withhold a strategic embrace from each other. Ms. Ayres makes it clear that the U.S. may need to sacrifice its relationship with Pakistan in the process if that country continues to serve as a haven for terrorist activity against India.

No account of the changing India is complete without a reminder of its continuing underperformance in key areas. Ms. Ayres notes that half of all India’s employed work in agriculture, which contributes only 17.4% of GDP. The share of manufacturing in India’s GDP is a paltry 18%, compared with China’s 30% and South Korea’s 31%. But if India “plays its cards right,” the next two decades, she says, “could be even more transformative than the previous” and would confirm the contention of Larry Summers, the former U.S. Treasury secretary, that India “could be part of the biggest story of our era, the coming of age of the developing world.”

Ms. Ayres draws a portrait of India in 2040—50 years after she first set callow foot in New Delhi as a Harvard junior—that takes the breath away. India could have a $10 trillion economy, just behind China and the U.S., as well as the third largest military, the world’s largest middle class and the world’s largest pool of labor. India will be, in her phrase, “the workforce of the world”: One in five of the globe’s workers will be Indian at a time when the West is in possibly irreversible demographic decline. With this in mind, Ms. Ayres counsels the United States to “do a better job preparing our own next generation to understand and work with this complex country.” India, for its part, has an even harder task. It needs to deliver.

Mr. Varadarajan is a fellow at Stanford University’s Hoover Institution.