Hoover senior fellow Šumit Ganguly recently released the second annual Survey of India through Hoover Institution Press. The report offers a detailed examination of the country’s current landscape, focusing on political, economic, social, and environmental challenges. It also tackles the evolving US-India relationship. Ganguly spoke with Chris Herhalt about how India’s place in the world is shifting as it grows its economy and asserts itself on the world stage.
Chris Herhalt: India’s Finance Minister Nirmala Sitharaman came to Hoover last year and spoke hopefully about trade relations with the United States. Those have not yet materialized. Where is the US-India relationship at the moment?
Šumit Ganguly: Yes, they certainly failed to materialize—those grand hopes that she had expressed during her visit to Hoover. Those hopes and dreams came crashing down on us. India and the United States did, however, reach a trade accord in early February of this year, and it dramatically reduced tariffs on India. That said, the US Supreme Court judgment on tariffs has now thrown the entire trade deal into disarray. We don’t quite know where matters stand. And apparently, negotiations are again under way between New Delhi and Washington to find common ground on trade. What is fascinating is that the Indians have scrupulously avoided saying anything that could be construed as being either inflammatory or intemperate in Washington, desperately trying to avoid a conflict with Trump and resurrecting more troubles.
Chris Herhalt: But then, Prime Minister Narendra Modi goes to China and is filmed shaking hands with Xi Jinping during the Shanghai Cooperation Organization meeting.
Šumit Ganguly: I thought Modi did that in a moment of pique with the United States, trying to signal to the United States that India had other options. But frankly, I also believed that it was a singularly inapt move on his part because that is precisely the sort of thing that would get under President Trump’s skin and once again lead to more troubles in Indo-US relations. But subsequent to that move, which I thought was singularly ill-conceived on his part and said as much in one or two interviews, the Indians have really been hiding. They’ve been scrupulously trying to avoid piquing the United States in any fashion, that episode that you so correctly highlight notwithstanding.
Chris Herhalt: Let’s turn to the 2025 India-Pakistan conflict, which had some alarming developments. The ballistic missiles, drones, the Indians targeting a meeting of senior Pakistani leaders—and then a cease-fire. In the context of the Indian security establishment pivoting more towards worries about China, did that confrontation change anything?
Šumit Ganguly: In the wake of the attack on Pahalgam, the resort in the disputed state of Jammu and Kashmir in the Indian-controlled portion thereof last year, the Indians resorted to an extraordinary set of strikes against Pakistan, and as you correctly point out, possibly even targeting their nuclear command and control facilities outside Islamabad. And this represented a dramatic escalation on the part of the Indian military, with the blessings of the political leadership. There was a great deal of concern about an escalatory spiral, which could, heaven forbid, culminate even in the use of nuclear weapons. None of that, of course, came to pass. And in about ninety-six hours, the crisis de-escalated and Trump claimed that he had played a major role in de-escalating it. There is an ongoing debate about his role, but that’s a subject for another day.
The real challenge that the Indians face is not Pakistan, which is really more of an irritant and can deliver periodic pinpricks, which the current government will not tolerate, as it demonstrated in the wake of the Pahalgam attack. It’s prepared to run risks and even countenance the possibility of escalation. The real challenge remains at the Sino-Indian border. That is not winding down anytime soon.
Though India and China have exchanged sweet words in the recent past, those sweet words, as an old English expression goes, “butter no parsnips.” The fundamental differences between India and China remain. It’s a structural conflict. The PRC [People’s Republic of China] is not going to give up its revanchist ambitions as far as India is concerned, and also sees India as a kind of an upstart in Asia that needs to be put in its place. Consequently, the Indians simply cannot afford to let their guard down along the Sino-Indian border.
Chris Herhalt: And there is a physical dispute over where that line rests. That is the heart of it, right?
Šumit Ganguly: In part, but it also has to do with self-images of India and China in Asia. Both see themselves as great powers—at least, India is a potential great power. China is a great power that has already arrived. And the Chinese resent and have long resented India’s attempts to play in the same league. China thinks India belongs in the cheap seats—in the nosebleed seats, to use a baseball expression—and the Indians are not willing to concede that. There is a segment of Indian opinion that says, “Look, let’s accommodate China,” but that’s not the dominant view amongst the Indian foreign policy and security policy elites.
Chris Herhalt: Let’s move to domestic issues. There’s a chapter of Survey of India 2026 that talks about how the government is trying to set up a Medicare- or Medicaid-style system, while trying to connect different parts of the existing health system to make a universal insurance program. And obviously there will be hiccups and disconnections, and lack of care in different places.
Šumit Ganguly: Oh, that’s absolutely true. The Indians are trying to knit together this nationwide health care insurance program, but given the sheer size and complexity of India and the costs involved, it’s not going to be an easy task. And in addition to that, under Indian federalism certain subjects are handled by the central government and certain subjects by the state government. It’s kind of a patchwork quilt. Some state governments are far more prosperous than others and can thereby deliver on many of these promises, whereas other state governments are constrained by the lack of financial resources and also the lack of attention to health care over time.
Chris Herhalt: Will navigating the state-versus-federal issue make things better?
Šumit Ganguly: It’s two issues, really. The state versus federal, and resources. When you’re talking about 1.4 billion people, this is a herculean enterprise. Also, there is something that has dogged India since independence: the issue of implementation. American political scientists have written about implementation—the way that grand plans conceived in Washington don’t always materialize in Peoria. There is many a slip between cup and lip. A famous American political scientist called Aaron Wildavsky, who taught at Berkeley, co-wrote an entire book called Implementation. In it he showed how the pathway from legislation passed in Washington, percolating down to the states, and then down to the local level often runs into many obstacles.
Chris Herhalt: Growth in India has been impressive for decades now. Is there an argument to be made that, as the Modi government says, by 2047 a lot of these problems will be largely solved? Or, even with all the growth, is there a risk that implementation problems or intergovernmental squabbling will derail some of the goals?
Šumit Ganguly: I’m an unabashed supporter of growth because in the absence of growth, you’re redistributing poverty, which is what India did for decades. So, the notion that we must focus on redistribution and not so much on growth is, I think, fundamentally a flawed idea. But there are two major problems with that growth.
The growth is taking place on a couple of different axes. One is north-south. I recently came back from Bangalore, which is India’s Silicon Valley, where the prosperity was palpable. And in fact, it’s suffering from the pangs of growth because there are so many cars clogging the streets. But I saw marvelous brewpubs, fancy restaurants, every conceivable consumer good that you could get in the United States or Western Europe widely available and with very little visible poverty. That is emblematic of much of the Indian south. But in the north, poverty remains endemic, growth is slow, and access to public services poor.
There is also a kind of east-west axis, where some of the western states are prospering at an extraordinary pace and doing exceedingly well. Not so much in many of the eastern states until you go into southeastern India.
So that’s one issue. The other is inequality. I’ve talked to prominent economists, including my colleague, Raghuram Rajan, here at Hoover, who is a professor at the University of Chicago. He doesn’t seem as concerned about inequality, and he says that’s almost inevitable in the early stages of rapid economic growth. Raghu is a noted economist. I’m not; I’m a political scientist. Nevertheless, it’s something I fret about. India is reaching levels of inequality comparable to Brazil at an earlier stage of Brazil’s growth, and the gap is really striking and visible. And one fears that this could be the basis of social unrest in particular parts of India. I’d love to be proven wrong, but it is something I fret about.
This interview was edited for length and clarity.
