Grand Tamasha

Sadanand Dhume and Tanvi Madan on India’s Triple Whammy: COVID, China, and the Economy

Episode Summary

Podcast regulars Sadanand Dhume and Tanvi Madan join Milan to talk about India's three concurrent crises.

Episode Notes

This week on Grand Tamasha, Milan is joined by podcast regulars Sadanand Dhume of the American Enterprise Institute and the Wall Street Journal and Tanvi Madan of the Brookings Institution to discuss the triple-whammy of crises facing India. The three discuss the latest on India’s contested border with China, the raging COVID pandemic--which shows very little sign of slowing down, and end with a discussion of the latest economic data.


As always, they end by chatting about the news you need to be following (but may not be) and who had the best and worst weeks in India.



  1. Tanvi Madan’s book, “Fateful Triangle: How China Shaped U.S.-India Relations During the Cold War
  2. Sadanand Dhume’s Wall Street Journal column, “What Beijing Lost With Its Border Clash Blunder.”
  3. Yamini Aiyar on the future of India’s fiscal federalism.
  4. Vivek Dehejia on India’s endangered growth story.
  5. Vijay Joshi’s book, “India’s Long Road: The Search for Prosperity.”

Episode Transcription

Milan  00:11

Welcome to Grand Tamasha, a co-production of the Carnegie Endowment for International Peace and the Hindustan Times. I'm your host, Milan Vaishnav. We are back after a period of many, many months with our Grand Tamasha news roundup. As always, I'm joined by Sadanand Dhume of the American Enterprise Institute and Wall Street Journal. Welcome back, Sadanand. 



Good to be back. 


Milan  00:29

… and Tanvi Madan of the Brookings Institution, author of the book Fateful Triangle, your go-to resource for understanding all things US-India-China. Tanvi, good to see you on Zoom.


Tanvi  00:39

It's good to be back, Milan.


Milan  00:40

So today on the show, we are going to be discussing the triple whammy of crises facing India. We'll discuss the latest on India's contested border with China, the raging COVID pandemic, which shows very little sign of slowing down, and we'll end with a discussion of the latest economic data - another round of bad news for the Indian economy. But let us start by discussing the China issue. We have seen this week tensions along the India-China border escalate after Chinese and Indian officials accused each other’s soldiers of firing warning shots. This was apparently the first time guns have been used along the contested border in many decades. Some I'd say highly respected analysts now fear that India and China may actually end up involved in some kind of hot war, shooting war. Tanvi, give us some context. What prompted this latest dust-up? And where do you think the frosty relations between the two neighbors stand?


Tanvi  01:36

Milan, the right answer to what prompted it is, we don't know precisely. And part of that is because both sides, as they have for quite a while, are pointing to the other one as having started things. The Indian side, who said there was an initial burst of movement, there was some activity, some kind of movement of troops, released a statement saying that in a particular part of the LAC - not where some of these activities before have taken place in the recent past -- they had seen the Chinese troop movements on the other side and that they took pre-emptive steps to tackle those. Now, those pre-emptive steps just happen to result in India taking the heights of many key points. And so, you know, one question is, it is equally plausible that the Chinese troops were moving and they might actually have an end. Everybody's probably really sensitive at this point on the Indian side. They don't want the Chinese to make more games. They might have actually taken some steps and the Indians said, "Okay, we need to go and take the heights and ensure that they don't take it." That's entirely plausible. It's also plausible that, you know, movements take place. And India saw this as an opportunity to essentially do a tit-for-tat, or what could potentially be leveraged down the line for India in negotiations, which is you establish a presence in kind of these areas, some of which China claims as well. And so the idea would then be that in the best of both worlds, you then sit at the negotiating table and say, "We'll all move back - now, we also have some things you want us to move back from, which are the heights." The other option for India is, since the Chinese might say this is not going to work like it has in the in the past - 2013 was the prime example, where we know that India had taken some tit-for-tat action and that it actually paid off at the negotiating table to get the Chinese to withdraw - but if the Chinese don't withdraw, the point is that India is in a better tactical position. Now all this means, though, is that there's an expectation, will the Chinese actually now not retaliate in turn? And the thing is, as you keep bumping up against each other, particularly before winter sets in, and movement gets a little bit more restricted, it's not impossible. The India-China war took place in October, November, but movement gets restricted. This is a key duration of time where, yes, there's been a potential for escalation even before. Now, the foreign ministers met in Moscow recently. The five points statement - I don't know who came up with doing five points because all it reminded me of is Panchsheel, which is remembered more in the breach than anything else. But I think wisely, everybody is saying, "Look, we seem to have seen this dialogue and everyone is saying the right things - let's see where it goes." There are a couple of differences from what we've seen before. The Chinese released their own statement. It was a little less belligerent, was, you know, broadly passive voice - "frontline frontier troops must be withdrawn," not "India must withdraw its troops." I think that's something that's positive. So there's less belligerence and the fact that they actually released a joint statement, but I think it will all be - it reminds me of what Steve Cohen used to say, which is "implementation hona chahiye," or, for your non-Hindi speakers, "there must be implementation." And so I think that's where we stand today. Let's wait and see.


Milan  05:39

Sadanand, also this week, in a separate development, the Indian government banned a whole slew of Chinese apps, I think something like 118 in total. This comes on the heels of a previous ban of 59 Chinese apps, including Tik Tok, which was a big deal earlier this summer. You wrote a piece in The Wall Street Journal in July that we'll link to which said that the ban could "seriously set back Beijing's ambition to replace the United States as the world's dominant technological power." Are you more or less confident in this possibility today in September 2020?



Of course, I have to start with a confession that I wasn't really clear what Babaji was. Apparently it's a really big deal. But, you know, to get to your question, it's not as though India necessarily matters at this point in terms of a market. So, for example, the last year for which we had figures available, Tik Tok in India accounted for just about 1% - or less, actually, not even just 1%, but less than 1% - of ByteDance's revenues (that's the parent company of Tik Tok). But India does matter in several ways. The first is that by banning these Chinese apps, India signals to others countries that this is possible. And almost immediately we saw Mike Pompeo talk about it after India's action - you see that Tik Tok is in trouble in the US, a lot of people are saying it must sell itself to US investors, you had noises about this in Australia, and so on. So in terms of precedent-setting, that's one thing that sort of effects the Chinese. The second is that this could extend beyond apps. And if for example, India decides, as seems likely from everything I'm reading, to keep China out of 5G, then that affects the global ambitions of a firm like Huawei. And thirdly, and this is something that I came across while researching this column, is that there's this debate going on about artificial intelligence, where some people say that what is really critical is the number of users, and so if you are locked out of the ability to have access to the data of tens of millions of Indians - even though those Indians may be providing you very little revenue per user, they're still helping you hone your algorithms and so on. So for all these reasons, if China and Chinese apps are locked out, it makes a difference to the future global ambitions of China as a tech power. So I don't want to exaggerate the point. But I do think that it is more significant than one would think at first blush merely by looking at revenues.


Milan  08:31

So Tanvi, let me ask you about the role of the United States in all of this. You know, of course, as is his wont, President Trump volunteered to mediate between China and India. I feel like each time he does this, it gets less and less news attention, which is probably a good thing. I'm not sure that many people really took it seriously this time, but there is some chatter, particularly amongst some Indians and Indian Americans that I've spoken with, that one of the real concerns is that a Biden administration, if that were to come to pass after November, might try to establish some kind of rapprochement with China, some kind of G2 future that could ruffle feathers in New Delhi. Give us a sense of your own view as someone who has studied US-India-China for the broad sweep of history, how might things change in a Biden administration? Or do you think the change is going to be on the margins?


Tanvi  09:26

So I think some of this comes from an impression that existed - despite how much India and the US did on the defense and security side in the Obama administration, there's this impression, and not just in India alone, a number of countries in Asia, but frankly, also in the US - that because President Obama wanted a climate change deal, he, you know, essentially looked the other way, or didn't press China or try to deter them. This usually comes in the context of the South China Sea. But people will point to that as an example of, you know, they could have done more then. And so there's this concern that that is what a Biden administration would do - that, either because they will think the Trump administration has gone too far or because they will want to work on these transnational issues and challenges like pandemics and climate change, that that logic will return. And, you know, the question is, what will the Chinese ask for in return? And they'll say, "Well, we only cooperate with you [when] it makes sense for us to do it, from our perspective. We will ask you to roll back certain things." So I think that is where this concern comes from. And I think you could probably add one more to that, which is this conversation that some are having on both the right and left in the US about, you know, really the US needs to focus at home and not make these commitments abroad. So I think that's why people are concerned. I actually think, though, that there are some - I don't think this idea that we're going to go back to that 2012, 2013, 2014 period is correct. I just think there's too much water that's flowed under the bridge. The Chinese don't help themselves with what they do. And you do have, interestingly, on the left - for perhaps different reasons, either because they're concerned about Chinese behavior vis-à-vis Tibet, Xianjiang, Hong Kong, or because of, say, labor groups who are concerned about it from that perspective - you do have concerns on the left as well, and then the Democratic national security establishment, particularly the younger generation, I think is also quite tough on China. So I think the question is going to be with the Biden administration. I think they will still see China as a challenge - you could actually see a situation where some of the things, the differences in approach they take, actually might benefit India. So, one area it would benefit is the couple of places the Biden team has said, "We work better with allies and partners, take everybody along, do not do things like unilateral tariffs that end up hurting our allies and partners as well." But I think the other thing is, if the Biden team is serious about investing at home, that is a good thing. Research and innovation in the US - a rejuvenated US is actually a good thing for Indian interest vis-à-vis China, I think. But the question is, will it be tempting for a President Biden who tells himself, you know, "I can convince Xi," and will the Chinese say, "We have a window of opportunity to offer him something he needs." But I don't think it's a given, and I don't think we're going to go back to a more accommodative [approach] - it will still be competitive, and I think too much has happened since... I'll just finally say one thing: one shouldn't assume that a Trump second term - yes, I think Indians, Indian Americans like that he was tough on China, but the unilateral approach he took hurt Indian interest too. Second, the one thing we know about him is there's some things he has an instinct on. Three things: trade, immigration and alliances. If he actually feels validated in those, if he's reelected, that could mean adverse effects for alliances in Asia, which indeed will not benefit India as it tries to deter China. So I don't think it's a given one way or the other. India will have to watch closely, but I think there are pluses and minuses to China policy that both might take - either a Biden presidency or another Trump presidency.


Milan  14:07

So let's transition to our second topic, a second happy topic, which is COVID. India earned the dubious distinction this week of surpassing Brazil for the title of the second worst COVID-affected country, accumulating more than 4 million total COVID cases since the pandemic first struck. On Thursday, alone in a 24 hour period, India registered more than 95,000 fresh COVID cases. Sadanand, let me start with you. How will history judge the Modi administration's handling of this public health pandemic?



This is gonna sound like a cop out, but I genuinely think it's far too early to say if this is something that will be over in three months or if this is something that we're going to be struggling with for three years, or are other countries going to get on top of this permanently. And so it's hard to say at this point. I will say that, you know, to Modi's credit, broadly, he hasn't been anti-science. He hasn't taken the sort of positions that we've seen Trump take on mask wearing - I think Bolsonaro sets the gold standard for craziness on this particular topic. And so, you know, compared to some of the populace with whom Modi has been compared, he's been fairly on the sane end of the spectrum. I think some people I've spoken with about this do feel that India moved too late. And essentially, it lost the month of February - was busy hosting Trump, busy destabilizing the government in Madhya Pradesh, and by the time the lockdown happened, it was already too late to actually effectively implement bracing procedures. The other criticism that I have found convincing, and I think most people would agree on this, is that the suddenness of the lockdown really turned out to be an economic disaster and caused a vast amount of misery. So if I had to take a guess at how history is going to judge Modi on this question, I would say at this moment, it does look like the major thing that we're going to remember is the migrant crisis. And unfortunately, he doesn't come out looking very good because it really has all the hallmarks of this impetuous style of governance that doesn't really believe in too much planning, believes in big impact. And if he had actually succeeded in stopping the spread of the virus, then maybe he would have been justified. But, as things stand, India has caught the worst of both worlds. They ended up really gutting the economy without slowing the spread of the virus.


Milan  17:07

So it's interesting just to go back to the first thing that you said, because it somewhat contradicts the other narrative, which is in fact that Modi moved too early, that he insisted on a highly stringent lockdown when he only had, you know, 500 cases. And as a result, given where we are now, with 80, 90, 100,000 cases a day, there is simply no appetite for any kind of serious lockdown because you had that window of opportunity and you used it too early. Do you something's valid there? 



No, because I think that the 500 cases was because there was very little testing. And again, the folks I've talked to - people like Jacob Hohn - on this say that essentially, this had already entered India by February. So, you have the first early cases come to Kerala, which were isolated successfully, and then you had this other batch with these Italian tourists in Rajasthan and so on. So by the end of March, even though officially India would have had only 500 cases, or 500-odd cases, I believe that the reality had already spread in a way that made contract tracing extremely difficult.


Milan  18:27

So, Tanvi, you tweeted about an initiative that India has undertaken with Japan and Australia called the supply chain resilience initiative, the SCRI. My question is not so much about this effort specifically, but the more general question: has COVID brought India closer together with other countries in the region, like the Quad countries, say, who are also concerned about China's rise? So, in what ways do you think COVID and geopolitics have kind of come together to create the shifting mood in Delhi?


Tanvi  19:06

I think it has had an impact. And I think partly it is a combination of China's behavior vis-à-vis COVID, what COVID has made evident about supply chains, and Chinese behavior during that time in terms of regional assertiveness. So all three elements, I think, have made a difference. And what they've done, I think, is whether it was the Chinese lack of transparency at the beginning, or then trying to use economic coercion to get other people to either let their people in or not institute travel bans - I think there will always these kind of abstract ideas about, you know, what a Chinese dominated Asia would look like, and now here you're seeing between the way they reacted to COVID - what they did in terms of trying to shape and influence their reports - but also what they were doing in terms of regional assertiveness across the board, whether it was against Australia, India, Japan, Taiwan, what they were doing in Hong Kong, and then pushing everybody, all the claimants in the South China Sea. All this is happening in the first few months of 2020. And what it does, I think, is it makes these abstract ideas very real. It's like, okay, this is going to be what China is going to be like, and you could think that - there's something Andrew Small said recently, that he thinks this is a missed opportunity with China where they could have actually come out of it, actually pointed to you or the US and others and say, "Look, we're actually going to be benevolent," but I think Chinese actions have made real that it doesn't necessarily stick to the rules. It's not transparent. Then you have somebody like former Indian foreign secretary and ambassador to [China] Vijay Gokhale who wrote a good piece on this in the New York Times, which is - and he linked it to COVID - that they're showing us who they are. And he also wrote it in another article: it does matter that they're not a democracy. And usually, you didn't have Indian policymakers ever talk about the Chinese not being a democracy mattering as such. So I think it has made a difference in terms of making these challenges not abstract but real. Because of Chinese behavior, I think, on the supply chain side, what it's done is - and this is for all these countries - a number of countries, India is a good example, have been talking about the fact that Indian pharma industry is way too dependent on advanced pharmaceutical ingredients from China. What does COVID make clear? Suddenly, it makes clear, one, that natural disruptions can occur, you just shouldn't be so dependent on one supplier - not intentional disruptions, as in China wasn't blocking APIs, just because of disruptions, because of COVID, you start realizing that supply chain dependencies could be real. And it's not just India who realizes this - everybody else realizes how dependent they are on medical equipment, and how China could use it - you know, not export enough, etc. And I think finally, because of economic coercion, and what they've done with the Australians in particular, which is that the Australians dared to just ask for an independent investigation, and then you have China essentially sanctioning them and making it harder for the Aussies to export barley, beef, and wine. I think those are the three things for China. And I think that these three things for China have also brought together - because this is happening a number of other places - so if you think about the supply chain resilience initiative, which is what Australia, India, and Japan are saying they're going to launch later this year, and [them saying] “we'll welcome other like-minded countries in different ways,” particularly Australia and Japan have very directly been affected by economic coercions from China. So, do you really want to... That resilience means either onshore or it means diversifying your suppliers, and I think what India will be hoping is, I think India wants kind of the best of both worlds, right. India wants to onshore most and diversify a little bit, but it wants everybody else to onshore less and diversify including to India. And I think that, you know, and you guys have spoken and written about this, at the end of the day, whether India can successfully do that really and be that alternative, or that kind of place where people who have a China plus one strategy can go, really depends on not just the announcements, not just saying we are ready for business, but whether it can actually offer that business climate that these companies and countries want. 


Milan  23:56

So, Sadanand, one more question on COVID. We haven't really seen major domestic pushback in a political sense. When it comes to Modi's leadership on the COVID question, you know, just like in the United States, sometimes you just feel like there is this awful statistic operating in the background of 1000 deaths a day and people have just, in a way, priced it in almost. Do you think that the pandemic is becoming kind of a non-political issue in India?



I mean, the real test of that is when we're actually going to see state elections, right. So, what's our evidence for that? I mean, we had a recent poll in India today that showed that Modi's approval rating remained sky-high - in fact, has risen. So that's certainly there. You know, I think this is something we've talked a lot about over the years. In many ways, Modi is Teflon - he is able to survive things that would really have hurt any other politician. He's of course helped by the fact that the opposition is particularly inept, and they're in the middle of their own extended meltdown. He's also helped-


Milan  25:02

Exactly - we keep extending it, it was 2014, it was 2019...



-he's also helped by the fact that the media in India is quite tame, and he has not been attacked for this the way I imagine he may have been if we had the sort of media we saw, say, in the last few years of UPA - where, you know, there was a sort of ability to really go after the government on television, night after night, and so on. The media is much, much tamer right now. And then lastly, I think - and, in fairness, there's some truth to this - a lot of people sort of say that, well, why blame Modi? I mean, we all know that India sort of doesn't have such great health infrastructure, doesn't have that many doctors per 1000 people and so on. And so I think, as in many things, he benefits from just coming across as well-intentioned, trying to do the right thing. And people don't really seem to judge him in terms of outcomes, which I think is one of the main - it's the greatest political gift, right? I mean, many people around the world, leaders around the world, must sort of be hoping and praying that - "Why can't we have this? Why can't, you know, people judge us because they think we want to do good things, as opposed to what we actually achieve?"


Milan  26:30

That would be great, like, in all of our yearly evaluations - like, "I really intended to do this book! I meant well!" This is a natural segue to talking about the economy. India recorded a nearly 25% decline in its GDP last quarter, the worst performance of any G20 country over the past couple of months. It's possible that these numbers could be revised further downwards in the weeks and months to come. Goldman Sachs now predicts a 15% economic contraction in fiscal year 2021. They're just sort of horrific, almost mind-bending numbers. Rahul Gandhi quipped that "Modi promised to end Corona in 21 days, but he ended jobs instead." Sadanand, let me ask you first, do we see any incipient signs from Delhi in terms of fashioning some kind of more robust, proactive economic response? 



There's been a lot of criticism of their response to COVID per se, right, and they've been criticized for being somewhat miserly in their response. They have done other things - they've moved in terms of agricultural reform, for instance, Tanvi talked about trying to roll out the red carpet for manufacturing to diversify, they claim that they want to sell a whole bunch of public sector companies, including Air India - I mean, we've been hearing about this for a while. So it seems to me that their response hasn't been non-existent. But it's almost as though it has not been particularly focused on the crisis at hand. And it's been - if you want to sort of give the most charitable possible spin, it's been using the crisis to, in fact, push through some other reforms.


Milan  28:32

Other reforms, which have been pending, which economists have long been pushing for. We've seen one major development, which is almost the breakdown in relations between the centre and the states over the issue of the goods and services tax, the GST. By law, the center is committed to compensating the states for a period of five years to make sure that the states are kind of made whole, that they didn't lose money during this transition period to full GST implementation and that the Act would be kind of revenue neutral. Now the center is going back to say it can't pay up because of the shortfall in revenues due to an "act of God," which has spawned many, many memes. Is there a chance that this major tax reform, which was seen as a kind of generational reform, could fall apart? And if so, what impact do you think that would have on brand India?


Tanvi  29:30

Sadanand, it'd be great to hear you. I mean, you've written about these kind of federalism issues. I don't want to turn it around and dilute you, but the three things I will say where I think, particularly in terms of where it might have an impact, particularly if you're looking at it from the outside - one, what does it say about the central government's commitment to these states? And that's linked to the other thing, which is, whenever we talk to the private sector, one of the things you hear, number one, when you ask them what they want to see in India, they say certainty and consistency. And if now it looks like, well, because they don't know if the government's commitment can be taken seriously, there might be changes. And so suddenly, again, you're adding another element of uncertainty into the business climate. What does it mean? And finally, what does this do to states' appetite to go along with reform that's done on the central level? Any reforms that are going to be done, you need a certain amount of state buy-in, and if they say, “Look, you reneged...” But, you know, you guys are more of the experts, so I'll be interested to get your sense.



I mean, where I see it move very quickly is that, there's a legal aspect and there's a moral aspect. And legalistically, the central government may, in fact, have a point, right, that there's this special cess, this fund that they have, and if there isn't money in the fund, they don't have to pass it on to the states. But morally, they don't have a leg to stand on. And I think in politics that matters. So I actually think they're playing with fire on this question, right, because whatever the legality of this, the fact is that the states and the people within those states were given to understand that they would be "made whole" as you put it over five years, and for the government now to turn around and get all legalistic will be seen by many people as a breach of faith and justifiably so. Frankly, it confounds me to see them take something this serious in such a cavalier fashion.


Milan  32:06

You know, Tanvi, I think the way I would respond to that is that there have been a lot of concerns over the past six years about the concentration of power in the executive and the PMO. And often, we then jump from that to talking about the erosion of horizontal accountability institutions, whether it's the Supreme Court, whether it's the Election Commission, the Central Information Commission, the CIC, right, and we sort of all know the five or six worrying signs. But I think the other way of thinking about this is the kind of vertical accountability or relationship between the center and the states, and here is where actually this government got off on a relatively good foot. It got credit from some quarters for abolishing the Planning Commission - which had always been seen as a very kind of top-down, one-size-fits-all thing, you know, where a Chief Minister has to come with a begging bowl and so on - and for accepting the Finance Commission's recommendations of devolving more untied funds to the state so that they could decide how they wanted to spend that money. What we're seeing now, I think, are signs that all is not what it's cracked up to be. So you had the 370 decision, Kashmir, right, the unilateral change of a federal relationship - that was one. I thought there was a data point in a piece that Yamini Aiyar had last week, which we'll link to, which showed that despite the central government accepting the Finance Commission's recommendations about devolving more tax funds, in reality, it never got anywhere close, because the center kept adding so many cesses, which are these one-offs that accrue to the center. And now with GST, I think we're seeing a kind of real vitiating of the atmosphere between the center and the states. And, you know, even the fact that we're talking about some important states contemplating that they might want to revisit the idea of being a part of the GST, I think, tells you how dire the straits are, right? So I think that the initial moves towards greater decentralization, devolution, cooperative federalism, now really stand quite diminished. Sadanand, on the kind of broader economic story, just to go back to that for a moment - you shared a pretty bleak column by Vivek Dehejia in Mint this past week that said, “People have been arguing that India's economic story has hit a roadblock, but I would argue that maybe it's completely over.” And Subramanyam Swamy, the unpredictable, shall we say, BJP MP, has also castigated in pretty vivid terms the government for its economic mismanagement. Do you think that we are entering a new chapter, that we've kind of had this 30-year golden economic era that's come to an end? I know I noticed that each day this week, you've been tweeting charts and tables from Vijay Joshi, his excellent book about India's economic evolution. Do you sense that we've kind of now come to the start of some new era that marks a real shift from the 20th century? 



Well, first of all, the Swamy part, right - I mean, of course, he has the magic wand: make him finance minister. So, always we take his criticisms with a grain of salt. You know, I thought Vivek's piece actually raised a really interesting question, right, because for so long now, since the sort of advent of reforms, we have presumed that if the Government just does a few of the right things, the underlying conditions in India are such - the distance from the frontier, the youth, the youthfulness of the population, the existence of an entrepreneurial class, the existence of an educated elite and a large number of engineers and so on - that India would be able to grow at a rapid rate, if not double digits, then somewhere close to it, say 8% or so on for the indefinite future. And that, of course, would have enormous implications for the country and the world. And my own sense is that it's too early to assume that COVID has simply knocked India off course, but I think it's a conversation worth having, and it's certainly worth revisiting. The one idea that's worth revisiting is, to what degree has the overly optimistic or potentially overly optimistic view been shaped by those eight excellent years India had, 2003 to 2011, and to what degree have many of us assumed that that 2003 to 2011 period was kind of what we could aspire to and return to? And is that realistic? And from everything I'm reading, it's certainly not realistic in the short term - "act of God" and so on. But the big question is, is it going to be? Is it going to be realistic to regain that in the long term? And I think on that question, we're going to see a lot of a lot of interesting debate in the coming years.


Milan  37:42

Yeah, I would just point out that, you know, the economist Pranjul Bhandari, who I think is one of the best people to listen to on the state of the macroeconomy, has been sharing this graph of India's potential growth rate and how it's shifted from being steadily at 7%, to then falling off to 6%, and now the medium term projections is that it actually is plateauing at 5%. Which, when you think about a two percentage point dip in potential growth is a pretty stunning development that has all kinds of larger societal political ramifications that go way beyond the economy. Let us end as we always do. First, starting out, Tanvi, maybe I'll throw this question to you - what is an underreported news story coming out of India that we should be paying attention to, but maybe not be as tuned into right now?


Tanvi  38:44

I usually don't, in fact, talk about foreign policy stories, but I think something related to India, which kind of got lost, is on the India-Japan side, which is Shinzo Abe's departure from the scene and the impact that might or might not have. The turn in India-Japan relations came prior to him - I mean, other administrations in Japan have shared this idea, but there's no doubt that, whether it was with the Manmohan Singh government or all the Modi government, that he has really kind of turbocharged, not just India-Japan relations, but also the Japanese rule in Asia in a way that has benefited India, including their big connectivity plans, but also the willingness to do things more on the security front, whether that was the Quad, doing bilateral now - India has Air Force, Army, and maritime exercises with the Japanese... So I think what the impact of that is might be [an important story]. And it's related to [the fact that] Japan has helped India, has been a force multiplier for India, as it doesn't have that capacity - partly for economic reasons, in certain countries, it's just easier for Japan to do these things. So I think it got lost in all the China things, but I think that's something... And related to that is going to be, you know, they had - Modi and Abe had this phone call, and India agreed to, essentially, a military logistics support agreement. And I was joking on Twitter that, you know - I mean, the US knows this, it took years to get one of these signed with India, and people talked about - you guys remember this - there were talks about, "you cannot sign this, there will be marauding sailors and soldiers, Americans, coming to the port and taking away our women." Well, now India seems to sign one of these every six months. It has status with Japan, but also Australia, Singapore, France, South Korea. So I think that's, you know, I don't even know if it's covered. It's a good thing that it's not getting much attention



Must check in on those sailors.


Milan  41:06

Sadanand, is there something out there that you think deserves more attention than it's getting right now?



Well, it's kind of sad - it's not that its getting no attention, but I think that, in this whole sort of ridiculous Sushant Singh Rajput-


Milan  41:19

I knew it was only a matter of time before we got there.



No, but I think the part that is actually interesting there is the relationship between the BJP and the Shiv Sena and where it's headed. The Shiv Sena - I mean, first of all, it matters because this is Maharashtra, the richest, most industrialized state and the second largest state in terms of Lok Sabha MPs. It also matters because the Shiv Sena is the BJP's oldest ally. And so the question really is, is there space in India for two Hindutva parties? Or even in Maharashtra? Or are we looking at a situation where the BJP essentially attempts to wipe out the Shiv Sena? So I think that's a really sort of interesting development with long-term implications for Indian politics which I haven't seen that much discussion of.


Milan  42:13

Okay, now we end with who had the best week and worst week in India. Tanvi, any nominees for best week?


Tanvi  42:21

You know, I was at a real loss to come up with a best week one this week, so I'm gonna take - for a change, I'm going to take a pass on that one.



Well, I was at a loss too for best week, but then I figured I'll just say Mukesh Ambani because he's the one person who always seems to be...


Milan  42:38

When in doubt...



Just like when in doubt, I toss in Rahul Gandhi for worst week.


Milan  42:45

So I have a suggestion, although it's cheating because it's really about an Indian American, although I think it could reverberate in India - which is this week, Netflix named an Indian-American, Bela Bajaria the head of its new global television division, which gives her executive oversight over all of the shows in development at Netflix, and she is the one responsible for greenlighting Indian Matchmaking. 


Tanvi  43:16

God help us all.


Milan  43:16

So if you liked Indian Matchmaking and you want more of it, it is apparently on the way because an Indian American is in charge.


Tanvi  43:23

But you know, I will say, if you were asking me about a best week that could involve Indian Americans, I do have one - I actually think Indian Americans voters are having a great month. I don't think I've ever seen both the parties pay so much attention to a set of voters who aren't large in number but have disproportionately provided campaign finance in the past - but this time, perhaps because of both that the Republicans are actually making a play for them, and Trump himself, but second, because of how few votes could make a difference in some of these swing states... and it's just, you know, Ganesh Chaturthi tweets from the Biden campaign, and, you know, Kimberly Guilfoyle coming up with a video - not to mention that strange Tomi Lahren thing that came out - but it's just - I mean, we'll find out, including some data being released next week that you could probably preview for us, but it is quite significant to see to see this much attention being paid.


Milan  44:32

Okay, we end on a sour note: worst week, other than the future rise of Indian Matchmaking? Any nominees, Tanvi?


Tanvi  44:43

Yes. And it is a combination of - I don't know if the worst week is Indian news channels, or if the worst week is the Indian public that gives these guys high ratings, but at a time when the trifecta of crises that you pointed out are playing out - maybe it's a bread and circuses thing, maybe people need a distraction, but this is affecting real lives, and whether for political reasons, whether for ratings reasons, it's just been, you know, kind of insane. And watching, whether it is that poor mailman who was surrounded by TV cameras - I mean, what did the mailman do to deserve paparazzi? - but I can't remember who it was who pointed out, you can blame the news channels all you want, but this is getting ratings, people want this, and so, I mean, how do you not say that's the worst week? I tried to mute every word that was, you know, Rhea or Sushant Singh, and somehow it keeps slipping through the cracks, my filters. But yeah, sadly this is affecting real lives and not just entertainment for a few people.


Milan  45:58

Sadanand, you have a last word.



So I actually have the same thought, but let me put it somewhat less delicately than Tanvi and say that, you know, I think that-


Milan  46:10

Our listeners count on you.



I think the worst week was Arnab Goswami. I think that increasingly it is difficult for him to maintain the pretense that he represents some kind of crusading journalism when it is clear that he in fact represents moral rot. And, you know, the number of people in India I've heard from and the way people are talking about this, I really think that, at least among a section of people, there's a sort of a tipping point and a sense that, you know, this is truly disgusting, and the way they have hounded this young woman, Rhea Chakraborty, the complete lack of ethics, this carelessness, the putting rumors out on national television, everybody and his uncle having a right to comment on it and an opinion, the ambushing of postman and all that, all the rest of it - that, you know, there's a rot at the heart of it. And I think he has for many people come quite clearly to symbolize that rot.


Milan  47:26

Well, there's not much I can add to that. So let me thank you both for coming - Sadanand Dhume of the American Enterprise Institute and the Wall Street Journal, Tanvi Madan of the Brookings Institution, guys, it's always a pleasure to have you. Let's do maybe one more of these around election time - I have a sense that we will have a lot more to discuss, particularly because it will be an election month and not an election day so we won't have any time constraints. Good to see you guys. Virtually, alas, but thanks for making time.



Good to be back. 


Tanvi  48:34

Thanks, Milan.