India, Before It Was Cool

>> Bill Whalen: It's Wednesday, February 12, 2025. And welcome back to Matters of Policy and Politics, a Hoover Institution podcast devoted to governance and balance of power here in America and around the world. I'm Bill Whalen. I'm the Virginia Hobbs Carpenter Distinguished Policy Fellow in Journalism. I'll be the moderator of today's show.

But I'm not the only Hoover fellow who's moderating podcasts these days. And with that in mind, I recommend you go to our website and one link in particular, that that is hoover.org/podcast. That's podcast with an S, let me repeat that, hoover.org/podcast and there you will find, yes, podcast.

You will find written commentary, you will find tailored videos. It is literally drinking from a fire hydrant, a policy, but it's what we do very well here at Hoover. So definitely check that out. So today we're doing something different on this podcast, something which we have not done since its inception, I'm embarrassed to say.

And we're going to talk about India, the nation of India, the subcontinent. It is home to the world's largest population, it is, I believe, the fifth-largest economy. My guest will correct me on that if I'm wrong. I believe it is projected to perhaps surpass Germany and Japan in the next two years.

It is also a country very much in the news today, Wednesday the 12th, because its prime minister, Narendra Modi has arrived in Washington, DC to have a meeting with Donald Trump. They're gonna have a one on one, they're gonna have a private dinner, not a state dinner, but a private dinner, which means that Trump is gonna really put the hooks on him for stuff.

There's a lot for the two to talk about in terms of tariffs, energy, defense purposes, maybe look at into the larger geopolitics of the region in terms of India, China and military, economic competition and so forth. So helping us to unpack that and more, including the Hoover Institution's interest in India.

We're joined today by Shumit Ganguly, who is a Hoover Institution senior fellow and director of Hoover's Huntingdon Program on strengthening US India relations. We're also joined by Dinsha Mistry, a Hoover Institution research fellow and research associate at Stanford University Freedman's Poly Institute for National Studies. Gentlemen, thanks for coming on the podcast today.

>> Sumit Ganguly: Thanks for having us.

>> Bill Whalen: So when we arranged this a while back, I didn't realize that Mr. Modi was going to be in Washington, but here he is. I believe he was in France discussing artificial intelligence before that. He's in the US for something like 36 hours, it's kind of pure barnstorming, if you will, but here he is.

So my question to you two, let's take the meeting not from Donald Trump's perspective, but from Prime Minister Modi's perspective, what do you think he hopes to get out of this one on one with Trump?

>> Sumit Ganguly: Well, I think he is once again trying to reestablish a rapport with Trump because he believes in personal diplomacy.

And during Trump's first term in office, he had actually forged a personal relationship with Trump. He was greeted with considerable fanfare when Trump held an event in Houston and when there was a reciprocal visit by Trump in New Delhi. And Modi also ensured that he took Trump to his home state of Gujarat, where they filled a cricket stadium.

And Modi is, of course, extremely concerned about the prospect of significant tariffs being imposed on India. And Modi no doubt wishes to speak to Trump about the very vexed issue of H1B visas. Which enables Indian professionals with significant qualifications to work for a period of up to five years in India as long as there is an employer willing to support them for an H1B visa.

These, I think, are the principal issues that will be on Mr. Modi's mind, but I'm certain there are other things that Dinsha can highlight.

>> Bill Whalen: Well, Dinsha, in fact, President Trump left a little gift on the Prime Minister, didn't he?

>> Dinsha Mistree: Yeah, it seems that this is just breaking news, It looks like that Trump has announced that there will be reciprocal tariffs put on any country that has tariffs.

India, of course, has very high tariff barriers. This is something I see more of as a bargaining move, sort of a first solve in Trump too. As Sumit mentioned, the US-India, the relationship between Trump and Biden was actually pretty close. And Trump's last trip, actually, right before COVID hit in his first term, was to India, where there was a lot of pomp and fanfare.

But underneath that was a prospect of a mini trade deal that was put on hold during the Biden administration. Biden didn't really wanna deal with things like tariffs or trade policy or anything like that, it seemed like. But what we're seeing now, I suspect Modi might wanna think about revisiting that.

You certainly will wanna be very wary of Trump's first folly, but I think India, for the most part, was probably expecting that.

>> Bill Whalen: I think the Trump foreign policy is pretty black and white. You're with us, or you're not, friend or family. Help me figure out where India fits in this, because on the one hand, he has called India, I think, the tariff king.

So that would make India a bad guy in Donald Trump's worldview. On the other hand, if you watched him campaign to get back in the White House, he didn't really rail that much against India to the extent he was going after other countries. It was China, it was Iran, it was countries close to the United States, Mexico and Canada and border policies and so forth.

So, simple question, gentlemen, in the Trump view of things, is India a friend or a foe?

>> Dinsha Mistree: It's a side to be courted, I would say. He certainly approached them as a friend before. I think we've expected a lot more from India vis a vis China, and some of that certainly has been built up behind closed doors.

It seems like India is taking a much stronger stance on that. The other big thorn in US India relations from a geostrategic perspective is, of course, Russia. Now, it's not clear where Trump is gonna fall on Russia at this very moment, and that actually works to India's benefit in some ways.

Because if Trump is being a little bit more cool towards Russia, then perhaps he will allow that Russia India relationship. But make no mistake, if India were to have its druthers, what they would want is they would want to have their cake and eat it, too. They would want to be friends with the world and enemies toward none.

 

And that's not going to fit very well in the Trump worldview, as you just described. India's gonna have to make some choices in the coming years, right?

>> Bill Whalen: Go ahead.

>> Sumit Ganguly: And speaking of choices, I think the one bur that could easily get into Trump's saddle is India's relationship with Iran.

 

India, over the years, under pressure from a series of American administrations, has actually reduced its dependence on hydrocarbo from Iran. And has reduced its presence in Iran, though it still remains committed to the development of a port. But it cannot afford to totally abandon Iran. And at some point, this issue may well come to Trump's attention.

 

>> Bill Whalen: I have confessed to being guilty of Indian neglect on this podcast, but here we are sitting at Stanford University in Palo Alto California. And Dinsha, you told me something very interesting as we're getting prepared for the show. You said you've been at Stanford for nine, almost 10 years, and there's very little in the way of courses offered on India's political economy.

I find this remarkable in several regards. First of all, Stanford is a university with a big worldview, number one. Second, Stanford is a university fast by the Pacific Ocean, so it tends to look toward the other side of the world, not toward Europe. And then thirdly, it's in the heart of Silicon Valley, the northern end of Silicon Valley.

And it's interesting, I think something like 1% of this area is actually Indian, but about 6% of the Silicon Valley workforce is Indian. And a much higher percentage, obviously, in the C suites and the executive positions. And then you get into the H1B issue that Sumit mentioned in, I think 70 of H1B visas go to India's software engineers.

Why does Stanford just not pay, and we don't wanna rip Stanford? Obviously, you have a large bet for Stanford, but why does India just not get the same attention that China does?

>> Dinsha Mistree: That's a great question that since I've been here, I've been scratching my head. When I first got to Stanford in 2015, I'll tell you, they had three Bollywood classes a quarter and no India political economy classes.

There's a lot of cultural stuff and culture is very important. Appreciating Indian culture, the deep, long civilization that has a long history. But just to have no political economy classes, policy classes, has always really surprised me and made me head scratch. It's not like there's any shortage of donors either.

If you walk around, especially the engineering quad, you'll find any number of buildings named after prominent Indians and Indian Americans. So it doesn't seem to be a money problem. I would suspect that as opposed to, say, the China programs that we've seen flourish on university campuses, where either the Chinese government has funded programs to try and encourage things.

Or there's been a backlash because China obviously gets the concern and the attention that it does. For the most part, India, it's not like the government of India has been focused very much on that. As a matter of fact, they've encouraged some of their biggest donors not to support US Universities in years past.

And reciprocally, maybe it's a blessing that India is in such a hot spot that we need to have programs about it. But at this point, India, as you let at the top of the show, it's just too big to ignore. Apart from all of the importance in geostrategic, apart from being the world's largest population, 22% of the world's population, the trade that we see, you mentioned the diaspora.

And it's just critical, especially on our campus, a bulk of our students, it's the largest place for international students. They come from India, apart from the students who are coming directly from India. We've got people of Indian origin, people who are born here and are now getting into Stanford.

So it's hopefully, something we can turn around. I think the Hoover program that we've started here, the Huntington Program, is the first step and hopefully one of many. I would love to see lots of India programs spanning the gamut of all kinds of different policy areas, where we've started with what we've started with.

>> Bill Whalen: Right, let's talk about the Huntington Program. It is formally the Huntington Program on strengthening US India Relations. The two of you were in India two years ago at a delegation featuring our director, Condoleezza Rice, who has a connection to India through her State Department years. But let's talk about the creation of the program.

Why did it come to be? The director is looking at the world, she's looking at India, and what is she thinking?

>> Dinsha Mistree: So putting myself in her head, maybe this might be risky for my job. You first tried to get me to talk about my employer, and now you're talking about our director.

It's okay.

>> Bill Whalen: It's okay, you'll take me down with you, so don't worry.

>> Dinsha Mistree: That's great. Well, that's dangerous for both of us then, I think. I mean, this is the blessing of having one of the world's best geostrategic thinkers running your institution. Conde was on India long before it was cool.

Secretary Rice recognized both the promise as well as the challenges of India well before a lot of other people were thinking about it, certainly on this campus, and I would argue across higher education space as well. As you mentioned, Secretary Rice, one of the big accomplishments she had toward the end of her State Department career was the US India civil nuclear agreement.

Obviously, there were lots of players. Obviously she had to work with a complex cast of India, but without her, we held a conference in May about this. Without her, it's just very clear that the deal would have either fallen apart or taken a very different form than what it took.

That deal, by the way, is one of the reasons why US and India, why we don't talk about India as a hotspot. It brought India back into the fold of respectable countries after a long period, long hiatus, and changed that entire trajectory. So in some sense, it makes sense that when Secretary Rice comes with her background, knowing how important India is, that she puts this program together. Sumit, you might wanna add some stuff about how we've gone about building the program and what we've done.

>> Sumit Ganguly: Yeah, I certainly shall. But before doing that, even during the initial campaign that George W Bush had for the presidency, Gandhi was already advising him as one of his principal foreign policy advisors.

And she wrote an article in a journal, which is a quasi academic journal, but those of us who study international relations either subscribe to it or receive it, because we are members of the Council on Foreign Relations. Which publishes it from New York, and it is one of the most widely read publications in the world as far as international affairs and foreign policy is concerned.

And in that, she wrote a article, I believe it was called A Republican Foreign Policy or Words to that effect. And in that, I noticed as early as that campaign, that she had devoted a paragraph to India, saying that this is already a regional power and will be a power of greater consequence in the world in the years ahead.

So, even before entering government, she had her eye on the ball, which is absolutely remarkable. And once in government, particularly in Bush's second term, after some cobwebs had been cleared and the Iraq situation had somewhat stabilized, they turned their attention to India. And in this particular program, I'm particularly, especially proud of being the inaugural director of the Huntington Program.

We are pursuing a multifaceted approach to India. Obviously, there is this trend of improving diplomatic relations. We are also keenly interested in bolstering the security and defense relationship, particularly against a backdrop, against a highly unpredictable, and that's perhaps a charitable word, People's Republic of China in Asia and beyond.

Something of grave concern both to Washington and to New Delhi, and particularly New Delhi, because New Delhi and Beijing are locked in a strategic rivalry for some time with no end in sight. So diplomacy, strengthening diplomacy is one strand. A second strand is geopolitics, and particularly the Indo US defense relationship.

A third strand is cooperation in the realm of energy. A fourth strand is to focus possibly on counterterrorism, an issue that remains of concern in both capitals an issue that might have temporarily gone away, but is going to rear its ugly head anytime. It's an unpredictable monster which still lurks in the shadows.

So, it's a multifaceted program focused on primarily these areas and of course obviously the Indian economy. And to that end, we are hoping to start an annual conference starting this November, bringing together some of the finest minds in this country to focus on the India-US economic relationship. And providing practical advice about some of the challenges that India confronts and where ideas and policy recommendations could be of value.

>> Dinsha Mistree: Yeah, I think that Sumit's covered it all. I mean, honestly, we're gonna leave no stone unturned in terms of trying to promote this relationship. I would add, apart from the immediate policy engagement here, honestly, there's an educational element here too on both sides. These two countries really don't know one another and you find that in the leaders themselves oftentimes.

They haven't traveled there, they don't understand the respective systems. Sometimes they choose people who are old hands and actually know what's going on. But sometimes it's not that way. I can mention to you, for instance, I've met Indian generals. Their first trip to the US, their first real engagement with any kind of American engagement, whether it's military or not, is on a two-day trip when they're about to retire.

And that's shocking to me because ideally if something happened, our countries would have some serious engagement.

>> Bill Whalen: I'm curious about this because we've had workers come from India, the United States for some time now. Americans have become much more aware of Indian culture through pop culture, Bollywood, which you mentioned, things like that, but yet doesn't seem to be kind of a connection, bonding between the two.

Is India kind of a close society in that regard? I mean, is part of the challenge just getting into India and just sort of earning trust, or is it more complicated than that?

>> Dinsha Mistree: It's more complicated than that. So within India actually I would say that they're very embracing especially Western culture.

They obviously wanna balance their own cultural values with Western culture. But India now has more than a million American citizens who live there. This is bigger than two congressional districts in the other direction. Many Indians, especially Indians from the upper economic echelon, they've got cousins who live here now.

Almost 2% of the US population is of Indian origin. So in these different dimensions, there's a lot of personal crossover. It's just when you look at the government, you find people who just haven't really gotten that much exposure to the other side, and that's to both countries loss.

I think that's something where this program really can do something in terms of educating, in terms of bringing both countries up to the prominence that it deserves. There is a lot of concern that if we help India build up its military, if we help its economy, but we did that with China, and guess what we were left with?

We were left with the mess. And I think that India's foundation, its principles are different. Ultimately, it is a democracy. Ultimately, it is a multicultural society. Ultimately, it does have a lot of traits that are actually very in line with what I would consider to be foundational American aspects.

>> Bill Whalen: But I think one of the lessons of the China relationship is that for decades there's been this underlying notion that, well, they're communists, but they're really capitalists at heart. And they kind of share our values when it comes to making a buck. But it turns out that it's actually, it's kind of a police state and they don't really share our values when it comes to freedom.

So my question too, gentlemen, is India more closely aligned with the United States in terms of values such as democracy, such as freedom?

>> Dinsha Mistree: I would say it definitely does. Where there are concerns, I think that you have two approaches, right? One is you can say we want to disengage, we wanna be away from you.

We wanna send you a message that what you're doing is wrong and somehow you should turn your story. Versus, even if you say that there are some issues, how about we actually think much more about deeper integration and showing them the values and the virtues of Western culture, society and economy?

I think that India is still trying to wake up, particularly from experimenting with socialism for 30 years. But they're willing to wake up, and now is the time really to embrace them. Sumit, would you wanna add?

>> Sumit Ganguly: Absolutely. You were asking Bill about is India closed? Why don't we have a warmer relationship with India?

In considerable part, it's a legacy issue. It's a legacy issue in that during much of the Cold War, India was at odds with the United States. In fact, a friend of mine who teaches at a university in Upstate New York, Kenton Clymer, wrote a marvelous book called Comrades at Arts.

And in that book, he shows how different strategies of economic development basically led the two countries in very different directions. And in the case of India, there was this kind of half-hearted socialism. In fact, John Kenneth Galbraith, the great economist, called it post office socialism. It neither produced growth nor did it result in a reduction in poverty.

Since 1991, following a major fiscal crisis, India opened its markets to the world, engaged in trade liberalization. Though Trump would argue much more needs to be done. And on this matter, he's absolutely right. But since then, India has been much more receptive to the United States, has attracted American investment, and as Dinsha pointed out, a million Americans live and work in India.

And consequently, I think the possibilities of a much closer relationship, based upon many of the strands that I had outlined that here at Hoover we are trying to pursue. But beyond that, the growth in people to people contacts, and where now even Bollywood stars are moving to Hollywood, something I never thought I'd see in my lifetime.

So the relationship has become much more integrated than ever before. We are really at the cusp of a transformation.

>> Bill Whalen: So you mentioned John Kenneth Galbraith, who was the Indian ambassador during the Kennedy years, during Camelot, wasn't Moynihan also an Indian ambassador at one point?

>> Sumit Ganguly: Absolutely.

>> Bill Whalen: Okay, so this is my question, last I checked, I don't think Trump has picked an ambassador to India yet, I might be wrong, but I don't think he's picked one yet.

So what is the model that you would look for? Would you look for an academic like Galbraith? Would you look for an academic, sort of great world thinker like Moynihan? Would you be looking for someone who's perhaps entrepreneurial with a business background? If you could build an ambassador to India, what would you build?

>> Sumit Ganguly: I would say above all, someone who is level-headed and at the same time has access to Trump's ear. Because in this administration, obviously the State Department, the Department of Defense, Commerce will play a role. But I think this is a president who really wants to put his own stamp.

Whether one agrees or disagrees with him is another matter altogether, but he clearly wants to put his stamp on both domestic policies and foreign policy. And ultimately it's someone who must have access to the White House.

>> Dinsha Mistree: You've got already on Trump's team some pretty strong people for India.

Mike Waltz, who's now the National Security Council head, he was the chair of the India Caucus. Marco Rubio, who's strong on everything internationally, just this summer, he had issued a proposed a very nice bill promoting stronger US India defense ties. So you've got some real heavyweights on the DC side, I think, on the ground in India.

Just as Sumit saying, you'll want somebody who has Trump's here and also can sort of cut through the noise to the extent that there will be any within the bureaucracy. Someone who's also a bit of a deal-maker, and so apart from the academics you mentioned, I think we've seen a couple of really good ones recently.

Ambassador David Mulford, who helped start this Huntington program and is currently traveling in India right now, he was working with Condoleezza Rice in terms of closing out this US India civil nuclear. The stories he has to tell. Boy, boy, you want someone who's really sophisticated on the ground.

If you're Trump trying to get a mini trade deal through or trying to build a new energy relationship or any of these kinds of things, someone who has an appreciation for the on the ground politics, but can also get on the phone with Trump. I would think the business community would supply somebody like that.

>> Bill Whalen: All right, let's talk about something which has earned my great appreciation, that is your survey on India. And let me clarify for our audience, when I say survey, I'm not talking about a poll, not talking about data numbers. What my two guests have done is they actually, they reached out to a group of experts on India and asked each one to write an essay, an analysis, a commentary, if you will, summing up an aspect of the Indian existence.

There are about eight to ten of these profiles, I believe, in this survey. It's available at hoover.org, you can download it and read it yourself. If you are traveling to India as a businessman, if you are trying to do something with the government, just trying to figure out how the country works, this is a must read, because you would just get a brilliant overview of all things Indian.

 

So, gentlemen, I'd like to, first of all, congratulations on doing it, you both co-edited the survey, I should mention. Tell me first of all how you went about picking these various topics and assigning them.

>> Sumit Ganguly: This was very much a joint effort. There are people whom I knew in the Bay Area and elsewhere, and even in India, whom I suggested to Dinsha.

Dinsha in turn, knew people who had prior Stanford connections who also could write with authority on particular areas. And the two of us essentially put our heads together and chose these eight individuals who are extremely knowledgeable in their particular issue areas. We are indeed planning on doing subsequent iterations.

I've already lined up five people for next year. And some chapters will be eased out because not enough changes take place on an annual basis and new chapters will be brought in.

>> Dinsha Mistree: Yeah, for academics in particular, this is a hard thing because we're not trained to write descriptively about what's happening.

And we're not trained to write descriptively about what's been happening in the last year or 18 months. As Sumit mentioned, this is something we wanted people to be able to take into their hands and say, hey, this is the stuff I need to know before I go there.

Obviously, there were a lot of things that we had to leave on the cutting room floor. We are talking about a very advanced society. But these were just the essentials. And there are some things definitely that next year we should definitely cover some other things. For instance, demography, which is one of the chapters that's not gonna change much in the next year or so, right?

So we might not need another demography chapter.

>> Bill Whalen: So there are four chapters here that I'd like for you two to touch on just briefly, but just explain what defined. The first one is, the assessment of India's economy. And if I read correctly, the Indian economy enjoys something like 6 to 7% growth right now.

Which Donald Trump would kill for because part of Donald Trump's schemes in Washington involve, I think, 4% growth to just kind of keep things on a steady basis with the debt. But here is 6 to 7% growth, but as the report the survey points out, it is unevenly distributed and it is economic inequality, in short.

So why is this this way in India? Why the inequality?

>> Sumit Ganguly: The inequality for the most part is a product of historical circumstances. As I said, India's namby-pamby socialism really failed to make a significant dental in rural and urban poverty. And since 1991, India has dramatically reduced poverty.

But I was talking to one of our senior fellows who's also a distinct or a highly distinguished professor at the University of Chicago, Raghuram Rajan, who's going to be here, in fact, next month. And he was telling me that inequality in the initial stages of rapid growth is almost inevitable.

That said, there are some structural issues that do need to be addressed. And this is a good point, a moment to hand over the baton to Dinsha, who's thought more about India's political economy than I have.

>> Dinsha Mistree: Yeah, so you mentioned that India is the fifth largest economy in the world, and that’s great..

It's growing at gangbusters. But that's also roughly the size of the California economy. Just to draw a parallel, 1.4 billion people versus 38 million people.

>> Bill Whalen: California has the same economic inequality as well, Barbell.

>> Dinsha Mistree: Yep, and California, just to drive back, they would go for 6% economic growth too, I would imagine.

>> Sumit Ganguly: Yes, everybody would.

>> Dinsha Mistree: Change that, but this is India's biggest challenge in its economy is not just managing the inequality and the poverty, but it's jobs. It's jobs, jobs, jobs. And there are a couple of different elements of it, really. India hasn't trained a workforce yet, at least not across the board in its country for those kinds of jobs.

Yes, they can train people who become the CEOs of Apple and Google or Microsoft and Google, but the downstream workers, that's constantly been a challenge and they're doing things to try and improve it. But you can't just train people one day and expect it to fix the next.

Also, there's a mentality there. I work with an NGO, teaches about 80,000 people a year across North India free English classes and computer classes. The number one thing that these students say when they come in is that they want government's jobs. This isn't atypical from what you hear in other developing countries, government jobs are stable.

They also come with a lot more prestige and they're well paying, but they're not saying teachers are police officers, they want government's jobs. So one big challenge is also just changing that mentality and opening up opportunities in the private sector, real opportunities in the private sector. To that end, we've got a really nice Hoover fellow who's joined us this year.

She'll be with us for several more years, Suhani Jalota, who's working on labor force participation in India. And she's trying to figure out how to get people out of this sort of mindset, how to get them plugged into the new economies, especially with AI, especially focusing on women.

But really it's broad based, trying to figure out how we can move the needle in that dimension. It's really exciting work she's doing. It's really important ideas on planet growth.

>> Bill Whalen: Sumit?

>> Sumit Ganguly: Yeah, I completely concur with Dinsha because despite rapid economic growth in the last quarter, India grew at 6.4%.

And that was a cause for grave concern that it was not going faster, more like 8% or aiming for double digit growth. Because if it grew at about double digits or even 8% for a decade, per capita income would double in a decade. And Modi has set a goal to transform India, it's a fairly ambitious goal, I must admit, to transform India into a developed country by 2047.

I probably won't be around, but it's a nice vision to have and certainly worth pursuing because it would essentially lift hundreds of millions of people out of poverty, which they are still trapped in. But Dinshaw is absolutely right, the key issue is employment. And one of the things China did, its authoritarian political structure notwithstanding, is they created thousands.

And not just thousands, millions of factory jobs which pulled from the 1980s onwards, from Deng Xiaoping onwards, just hundreds of millions of people out of abject poverty. I don't care for their political system and never have, but I have to hand it to them that they did something extraordinarily intelligent.

Taking advantage of economies of scale by hiring millions of workers and turning China into the factory of the world. Quite like the United kingdom in the 19th century.

>> Bill Whalen: You mentioned Modi's 2047 deadline, I assume that's because that's the 100th anniversary of independence.

>> Sumit Ganguly: Absolutely.

>> Bill Whalen: Hey, I got that one right.

Okay, all right. Second topic I'd like you to delve into is foreign policy. And here the survey calls it a quote, Focused and Dynamic Foreign Policy. And I walked away a little confused from this one in that this write-up says that India really isn't crazy at the thought of entering long-standing alliances.

Which I guess would be like a pacific version of NATO or something like that, but it's not averse to treaties and pacts and alliances at the same time. So can you two walk me through the nuance of that?

>> Sumit Ganguly: Well, I'm gonna steal a sentence that Dinsha used early in this conversation, that India doesn't want to be enemies with anyone and wants to be friends with everyone.

I think that pretty much sums up Indian foreign policy with rare exceptions like its local rival, Pakistan, which, owing to Pakistan's own policy choices, basically Pakistan has lost that rivalry. That rivalry, for all practical purposes is over. India is trying to buy breathing space with the People's Republic of China because it recognizes the extraordinary asymmetries that exist currently between India and the PRC.

For example, the PRC's economy is six times the size of the Indian economy. It's foreign service multiple times the size of the Indian foreign Service, and its defense spending, even based upon unclassified figures, is about three times the size of the Indian defense budget. Given these gaps and asymmetries in the relationship, India's foreign policy elite is simply trying to buy time and trying to avoid alienating the PRC.

And in fact, Dinsha and I have just initiated a project about this, about how India might best cope with the long term threat that it faces from the PRC. So this is a real problem that India has to grapple with. But basically, I think Dinsha's characterization is correct.

While it does not want to build alliances, it's happy to live with various partnerships, including the one that has been forged on a bipartisan basis across multiple administrations with the United States.

>> Bill Whalen: Dinsha, tell me what the word Vishwa guru means. Did I get it right?

>> Dinsha Mistree: You did get it right.

>> Sumit Ganguly: You did.

>> Bill Whalen: Vishwa guru, yeah.

>> Dinsha Mistree: I think in practice what they wanna be is educating and leading the world, especially the developing world, but really the world in terms of what the right kinds of practices are.

>> Bill Whalen: Well, that word translates as world leader, doesn't it?

>> Dinsha Mistree: Yes.

>> Bill Whalen: Okay.

>> Dinsha Mistree: But gurus are sort of teaching, right? So educating in that way, not forcing the world into its worldview. But just to return to what Sumit said, I think, the US has a lot of troubles with Canada and Mexico as its neighbors. Imagine if we shared a land border with China and imagine if that border.

>> Bill Whalen: And Pakistan.

>> Dinsha Mistree: And Pakistan, yes. These are nuclear armed countries that claim part of your country as their own. How do you handle that? It's not an easy question. We're very keen, obviously on saying that the US and India should work very close together. But we understand that just for breathing space, some of the things that we would love to see them do posturing on might be very difficult for India. So that's the big challenge for them, just their own border. How you deal with that?

>> Bill Whalen: You've heard the phrase American century. We've had alarmists talk about a China century, but does anybody in India talk about an Indian century?

>> Dinsha Mistree: They talk about it quite a lot. Yes, of course. I mean, maybe not in those languages, but in that sort of a language with Vishwa guru and terms like that. They wanna be seen as, I think, the reversion to what we're seeing in India, they wanna be recognized as a civilizational power. What that means is they're building off not just of the last 10 or 15 years, not just even of the last 75 years. 

But they're trying to harken back to a five, 6,000 year tradition, say, hey, we're here, this is our civilization, don't tread on us sort of thing. That doesn't just involve China, that also involves the West. They don't wanna be pushed around by anybody. They wanna be more assertive and say, we're here and we deserve our own space.

And sorry, it's a much more assertive sort of aggressive foreign policy than what we've seen from India previously.

>> Bill Whalen: Topic number three is science and technology and here I'd like you to talk about how India plans this. For example, they had a science, technology, digital India plan, I think back in 2015.

But I mentioned the beginning of the podcast that Prime Minister Modi was in France attending an AI summit. I've read where AI related jobs globally will be something like 100 million. So let's talk about India and its role in artificial intelligence.

>> Dinsha Mistree: Absolutely, so just science and technology generally, I would say this is my personal interpretation.

The state has had just too much of a heavy thumb on it. Most of the money goes towards systems that worked in the 40s and 50s, these large vertical bureaucratic scientific research agencies that just don't produce enough. A lot of research money also goes into state owned enterprises from the government.

There's been very little amounts of money that the way we have it to smaller companies, to R&B, to universities. We just don't see that, India now is starting to develop those sorts of systems. The National Research foundation that they're creating is one such model that they're trying out.

This is a big shift from how they've previously done it. I would also like to see revisions to the tax laws that make research and development beneficial know run through the private sector a lot more. Those are things that India has to sort out for itself. We can provide some models but they have to make the decisions on how they do this seriously.

It's a real tragedy because at the top of the system again you've got for instance the top tech companies in the US. The people who run the LLMs at all of these companies are people who are trained in India, right? So they've got the skills and the capacity.

It's just they could get the government just a little bit of the way out. They'd have a lot more room to run and maybe we'd see Indian versions of Apple and Microsoft and all of those sorts of things that would make our lives a lot better, quite honestly.

>> Bill Whalen: Sumit?

>> Sumit Ganguly: Yeah, I completely concur with everything that Dinsha has said. For example, in the United States there's a great deal of admiration, and understandably so for the graduates of these Indian Institutes of Technology, which was set up from the 1950s onwards. Because they are highly skilled engineers who are talented, who come to this country, many of whom are at Stanford itself, both as students and faculty.

But the problem with the IITs is that they don't incubate novel research for the most part. They train people exceedingly well, but they don't create people with an entrepreneurial spirit who are willing to take risks until they come to this country. In India, they are perfectly content to go work for a major engineering firm and the products that they produce are perfectly reliable.

But you don't have this kind of propensity to take risk, this propensity to be an entrepreneur, to innovate. And this is where India really needs, in my judgment, to create a ecosystem which encourages both entrepreneurship, risk taking and innovation.

>> Bill Whalen: Would you drive that through universities similar to here in the United States?

How exactly would you create the ecosystem?

>> Sumit Ganguly: I think you have to work with both the private sector and with universities and to accept the fact that many of these things are going to fail. This is the most wonderful thing that I've discovered after living for 50 years in the United States is that there are second acts in American life.

>> Dinsha Mistree: I would say the way that it works in the US, I mean the great genius of it was post World War II. What we did was we really started to think about how we could have a bottom up system, small teams of innovative scientists really with the politicians set aside.

Doing whatever they thought was the big breakthroughs through peer reviewed systems and merit based systems and the like. That requires some level of humility on the part of the government saying, you know, we think AI is important. Let's find the people who are actually doing AI and let them sort of determine the priorities for this space until it's strong enough to run on its own.

That can be very hard with a generalist bureaucracy that might have very different opinions about what the future of this very fast changing space might be. That seems to be a challenge.

>> Bill Whalen: And the fourth and final topic area I want you to address, gentlemen, is demographic trends.

This was an eye opener for me. So I don't know how closely you follow American politics and American policy, but politicians here love to use a phrase called silver tsunami. And what that reference is is people like me, people born between 1946 and 1964, the boomers. We're hanging around, we're living longer than people thought, we're draining our entitlements.

We're draining our healthcare system, and we created a financial mess, and it's complicated. In short, we don't have enough young people in this country. We have too many old people, Japan has the same problems you will. So as I'm reading this report, I'm walking around thinking, India has the world's largest population.

It is a fertile country, it must be just a young country. And yet I read about demographic trends and I see the phrase maturing country. So what does this mean? It's a maturing country.

>> Dinsha Mistree: You're making me feel like I need to have more babies. I'm probably good with the two that I've got.

I think that what we're seeing with India right now is what we've seen with a lot of countries where the economy is maturing. People tend to put off having children for that reason. I think it's also just, honestly, to a certain extent, Western exposure, right? You start to watch enough US television shows where you've got single people in their 30s and that rubs off on you in some ways.

That, for instance, Indian TV that talks about being married by 21, it's very different. So there's something happening in the psyche there, but we definitely see pressure to delay having kids. Right now, India has dropped just below replacement rate for children. It's not going to hit them for another generation or so.

But as the years go by and people start to age out of that workforce, especially that 20 to 30 year timeframe, the population will keep growing for another 20 to 30 years.

>> Bill Whalen: Would you add healthcare to that in terms of longevity, people living longer through science?

>> Dinsha Mistree: That's definitely happening as well, absolutely.

And in India, they've made great strides in terms of improving public health, really big, important improvements. And that's only gonna get better as the economy improves. But that keeps people alive longer and people expect the state to help older folks in retirement pay for that. So we're also going to see a lot more demands for social services, welfare.

>> Bill Whalen: Am I wrong to say that the largest population in the world has a fertility problem, or.

>> Sumit Ganguly: I wouldn't say that it's a problem. I think this is actually a desirable goal because in the 1960s and 70s, there was this huge fear that the Malthusian nightmare would come to haunt India.

Population growth would completely outstrip India's ability to produce food, let alone housing and education and healthcare. In fact, a Stanford professor, Paul Ehrlich wrote a major book called the Population Bomb, which I remember reading as a college student in the United States and fretting about the country of my birth.

That Malthusian nightmare, for any number of reasons hasn't been realized. So it's actually a desirable state of affairs. But as Jack Goldstone, our colleague in that chapter, points out that there's a north south divide in India. The southern states are much more prosperous and there you've actually not only hit zero population growth, but you're going below replacement levels.

It's the northern India, significant parts of northern India that still have large families and inadequate means to support them.

>> Bill Whalen: Dinsha, are you suggesting a southern India lifestyle comparable to the Bay Area lifestyle in terms of two income, no kids for a long time and commercial goods? And we're gonna stream a lot of TV and eat well in restaurants and we'll have kids.

Well, we're kind of ready, but we're not gonna put any pressure us into it.

>> Dinsha Mistree: You're definitely seeing more of that. Even smart people can disagree and I like to see more babies. So I think that I'd love to see India continue its demographic prosperity, if you will, but this is definitely something that's happening.

People are having fewer babies where you're seeing it. Apart from just the south north divide, you're also finding Muslim communities in particular are continuing to be very fertile and that could be very good for India. But it will create some internal political challenges for them as that population expands.

And particularly in the south, you see that population decline.

>> Bill Whalen: Okay, final question for you gentlemen, I sure appreciate your time today. There's been a lot of talk in this country about a so called vibe shift after this election of kind of a rejection of DEI in the country kind of politically, the pendulum swinging the other way.

When we talk about India, and especially young Indians, aspirational Indians, is there a vibe shift in the country in that regard? And the vibe shift, the younger generation is seeing the world differently from the Cold War generations.

>> Sumit Ganguly: Most definitely, and but this is evident amongst educated Indians.

I mean this is anecdotal, obviously. And as social scientists, we are told never to rely on anecdotes and consider them to be data. But sometimes anecdotes are manifestations of change taking place. Walk into a mall in India, in a major city, and for a moment you might blink.

And other than the brown skins, you'd say what's different over here? There's an H&M, there's a Zara, there's a Starbucks, brands that we are completely familiar with and would expect at a major American mall. They're studded across India. And you have young people who think that this is what they should not only aspire to, but this is something that they take for granted.

>> Bill Whalen: Okay, but Dinsha, are they serious people? Are they serious young people?

>> Dinsha Mistree: Of course, all young people have to be serious. I think there is actually also a big vibe shift changing right now. The US for 50 years has been the dream for at least the upper elite Indian community, and it still is.

There are a lot of people who come here, but increasingly I hear a lot of Indians wanting to stay home, which is great. Their economy is providing more opportunities for them. The more concerning aspect is when I hear Indians who aspire to go to friendly countries like Australia and Europe.

And I just get a little bit concerned that America has lost a little bit of that luster in India. It used to be the place where dreams were made, and now I think it can return to that. But it's not felt like that among the young people, especially the serious young people, as much as it once was.

>> Bill Whalen: Well, gentlemen, we're gonna leave it there. I want to thank you both for really an enlightening podcast. I really enjoyed reading the survey. I learned a lot about India I did not know. It's always good when I'm like, ignorance is pointed out to me. But it really is just great job of explaining this country.

And again, if you're going to India, if you're doing business in India, you want to just learn more about it, read this survey. Definitely check it out. So again, gentlemen, congratulations, a job well done.

>> Sumit Ganguly: Thank you very much.

>> Bill Whalen: You've been listening to Matters of Policy and Politics, the Hoover Institution podcast devoted to governance and balance of power here in America and around the free world.

If you've been enjoying this podcast, please don't forget to review and subscribe to our show. And if you wouldn't mind, please spread the word, tell your friends about us. The Hoover Institution has Facebook, Instagram and X feeds. Our X handle is @hooverinst that's H-O-O-V-E-R-I-N-S-T. While you're at hoover.org, by the way, you sign up for the Hoover Daily Report, which keeps you updated on what Sumit and Dinsha are up to, as well as their colleagues.

And that is emailed to you weekdays. Also @ hoover.org you will find the Hoover Institution Survey of India, edited by Sumit and Dinsha. It is just fascinating to read about the promised potential and reality of India as a world power. For the Hoover Institution, this is Bill Whalen.

We'll be back soon with a new conversation. Until then, take care, thanks for joining us today.

>> Presenter: This podcast is a production of the Hoover Institution, where where we generate and promote ideas, advancing freedom. For more information about our work, to hear more of our podcasts, or view our video content, please visit hoover.org.