India and the Political Economy of Deferred Power

India has achieved something that puzzles observers of rising powers: durable political configurations that preserve autonomy and legitimacy while systematically deferring the costs required to realize its abundant potential and ascend to the status of a first-rate power. These configurations tend to produce resilience without decisiveness, relevance without dominance, and endurance without closure. They are not failures of ambition or capacity but rational outcomes of overlapping systems—political, bureaucratic, industrial—each optimized to absorb pressure rather than compound it.

In strategic discourse, India appears perpetually on the verge of arrival. Its economy grows, its population is vast, and its geographic position pivotal, and yet among analysts tasked with evaluating power rather than narrating it, confidence remains divided. Consider India’s carrier ambitions. Indigenous construction of INS Vikrant began in 2009 and concluded in 2022; this amounted to roughly thirteen years from keel-laying to commissioning, with repeated delays relative to early planning timelines.¹

Meanwhile, since 2012, China has commissioned Liaoning (2012), Shandong (2019), and Fujian (2025), and is constructing a fourth carrier.² The gap is not in engineering sophistication but cadence, the ability to move from one unit to the next without institutional reset, to treat construction as a repeatable process rather than a heroic event.

The standard explanation, that India’s rise is merely delayed, misreads both history and political economy. Large states do not automatically converge toward great power capabilities. Some accumulate momentum, but others settle into conditions of stability which nonetheless foreclose further trajectories of progress. India occupies such a position, though mounting pressure may render it unstable. After all, being a first-rate power is not a question of prestige but of throughput: the capacity to produce, replace, and impose at scale without institutional panic or reset.

India’s difficulty lies less in ambition than in the historical logic that shaped its legitimacy as a modern state: a logic rooted in continental sufficiency, where internal consolidation mattered more than external projection. That logic survives today in democratic accountability structures that punish visible failure while tolerating delay and encouraging endurance over execution. What distinguishes the present moment is not sharper pain than in past crises, but greater visibility. Systematic gaps, once narratable as choices, are now exposed as constraints and increasingly difficult to explain away.

This analysis matters for American strategy because Washington has long cultivated India as a strategic partner in the Indo-Pacific region—and because India’s institutional pathologies mirror, in exaggerated form, problems the United States also increasingly confronts. Both are large democratic states that suffer from sclerotic procurement, risk-averse accountability, and the temptation to substitute alliances and signaling for sustained industrial capacity.

The Foundations of State Power

Throughout history, great states have rested on unglamorous foundations: industrial depth, maintenance ecosystems, standardized training, and bureaucracies that learn through iteration rather than reset through avoidance.

It’s worth noting that while states tend to announce themselves through visibility (e.g., deployments, exercises, and summits), it is in closure that they operate at their highest pitch, and closure is control over outcomes: denying access, dictating tempo, and forcing decisions. Many states generate presence, few sustain closure, and the difference lies in compounding. Power can accumulate once institutions learn to tolerate failure as a cost of learning. Where failure is politically fatal, the process of learning stalls. Where delay is safer than decision, systems drift toward forms that minimize accountability rather than maximize performance.

Britain’s nineteenth-century naval dominance illustrates this. British power rested less on superior ship design than the global repair infrastructure that allowed the Royal Navy to remain on station while rivals cycled in and out. Dockyards in Gibraltar, Malta, Bombay, Singapore, and Hong Kong provided continuous maintenance. Standardized training meant crews could be reassigned without performance degradation. By the 1880s, Britain could sustain blockades, patrol distant waters, and respond to crises simultaneously, less through sheer brilliance than systems that absorbed attrition as a routine cost.

Skepticism toward India’s rise rests here: though India has demonstrated tactical skill and technological sophistication, the question is whether success reproduces itself institutionally under stress. In India, success often remains episodic. Consider a representative pattern across major programs over the past two decades.

The Indian Air Force’s HAL Tejas fighter achieved operational induction in the mid-2010s, but production expanded slowly and remained below air force targets for much of the following decade, with delivery timelines repeatedly revised despite growing order books.³ Elsewhere, the Arihant-class ballistic missile submarine program has unfolded over roughly two decades, with INS Arihant commissioned in 2016 and a second boat, INS Arighaat, commissioned in 2024.⁴ (More examples of programmatic delay and dysfunction are discussed below.)

This is less ineptitude than institutional optimization for different outcomes: minimizing exposure rather than maximizing throughput. If India were to sustain high-volume industrial cadence across defense production and infrastructure for a decade, with shortening iteration cycles, rising replacement rates, and declining unit costs, this argument would require revision. That threshold has not been crossed, though pressure is mounting.

The Origins of State Endurance

India’s current configurations crystallized through specific historical conditions that made internal consolidation rather than external projection the basis of state legitimacy—and made autonomy without closure appear preferable to available alternatives. Partition was formative. The violence of 1947 killed perhaps a million people and displaced another twelve million.⁵ The trauma demonstrated that the Indian state’s primary challenge was preventing fracture. Pakistan’s existence as a hostile neighbor mattered greatly, but the deeper threat was the precedent of territorial disintegration along communal lines.

This shaped post-independence legitimacy decisively. The Congress Party derived authority not from military victory—India had gained independence through negotiation—but from the promise of being able to hold diverse territories and peoples together while building modern institutions. Success meant preventing further partition, managing heterogeneity, and demonstrating that unified India could function without requiring excessive cultural uniformity or authoritarian control.

This logic had deeper roots than partition alone. Unlike China, Russia, or America, where legitimacy involved continental expansion narrated as territorial consolidation, India’s civilizational heritage provided alternative foundations. Historical Indian polities derived authority from cultural synthesis rather than sustained territorial growth. Consider the Buddhist monarch Ashoka’s turn from conquest to dharma, the Mughal composite culture uniting Islamic and Hindu elements, and even British administrative systems that accommodated diversity. All established precedents where legitimacy came from governing communal differences rather than imposing singular national identities.

Post-independence India inherited most of the Raj’s territorial extent without inheriting the conquering logic. The question was whether such diverse territory could be held together voluntarily. Successfully managing twenty-two languages listed in the Eighth Schedule of the Indian Constitution, multiple religions, and vast regional variation became itself a legitimacy-generating project requiring no external validation.⁶

China faced similar diversity but treated Tibet, Xinjiang, and Taiwan as “internal” consolidation requiring external projection and cultural homogenization. India’s accommodation approach foreclosed certain pathways to throughput-oriented power but preserved a different basis for authority.

External projection would have undermined this basis of legitimacy. Military adventurism risked domestic fracture by privileging certain constituencies over others. Most fundamentally, projecting power externally would have required centralized, extractive state capacity that would have been difficult to sustain politically given India’s diversity and federal structure.

Non-alignment was the international expression of this domestic logic. Autonomy—avoiding subordination to either Cold War bloc—allowed India to shun external demands that might force internal reorganization. By remaining outside formal alliances, India avoided pressure to standardize military procurement, accept foreign bases, or align economic policy with superpower preferences.

The 1962 war with China and subsequent wars with Pakistan might have disrupted these configurations, and yet they didn’t. The defeat at the hands of the Chinese was attributed to leadership failure, that is, problems solvable through incremental adjustment. The 1971 victory against Pakistan, which secured the independence of Bangladesh, validated the existing model as India achieved decisive outcomes without needing to industrialize defense production or pursue regional hegemony. The threat environment remained manageable.

The federal structure reinforced these dynamics. Defense production facilities are distributed across states partly strategically but primarily to spread political benefits. This distribution prevents concentrated defense‑industrial constituencies that might lobby for institutionalized high-volume production. Instead, facilities operate below optimal capacity, each protected by local interests but none large enough to achieve economies of scale.

By the 1990s, these configurations had become self-reinforcing but not monolithic. The economic liberalization of this decade increased growth without fundamentally altering risk aversion in strategic sectors. Nuclear tests in 1998 validated major power status without requiring conventional force modernization.⁷ The state achieved recognition while avoiding the institutional costs of sustaining closure capabilities. Yet this settlement faced mounting challenges that had not been resolved, only deferred.

The Political Economy of Delay

India’s endurance through these political and institutional configurations cannot be understood without examining how democratic accountability operates in national security and infrastructure domains.⁸ This is not a generic democratic problem but a specific institutional failure mode. South Korea, for instance, reorganized its defense-industrial base around throughput and cadence while remaining democratic.

The puzzle is that Indian democracy produces intense electoral competition and sophisticated policy debate, yet this competition has not generated durable reform coalitions around defense-industrial throughput or infrastructure execution. The likely explanation lies in how different failures are politically priced: visible failure carries catastrophic political cost, while productive delay carries almost none.

Consider artillery modernization. After the 1999 Kargil war, the Indian Army drafted the Field Artillery Rationalisation Plan (FARP) to replace and standardize much of its artillery inventory around 155 milli­meter systems, including a requirement for tracked self-propelled how­itzers. Progress across the artillery portfolio was slow for years, shaped by repeated tender cycles, trials, shifting requirements, and an acquisition environment conditioned by earlier procurement controversies.

In the tracked self-propelled category, the Ministry of Defence selected Mumbai-based firm Larsen & Toubro and South Korea’s Hanwha (K9) as the preferred bidders in 2015 after trials; in April 2017, it signed a contract for one hundred K9 Vajra-T guns, with most produced domestically by Larsen & Toubro. Induction began in 2021, after years of delay that generated little institutional learning.⁹ The institutional lesson lies less in the platform choice, which proved durable, than in the incentives. India’s vigilance architecture is designed to deter corruption and procedural abuse; in practice, it can also reward political defensibility over speed.

This pattern extends beyond defense. The Mumbai–Ahmedabad high‑speed rail corridor, announced by Prime Minister Narendra Modi in 2014, remains six to seven years behind schedule. Yet the project is not failing in bureaucratic terms: reports are filed, committees convened, funds allocated. Delays impose no personal cost. Only visible failures—cost overruns, procedural violations—trigger scrutiny. Time itself is not audited.

Contrast this with South Korea’s experience. South Korea has faced an existential threat from North Korea, a threat far more acute than India faces from Pakistan. It operated under authoritarian governance during initial industrialization but remained democratic during defense-industrial maturation (1990s–2000s). What differed was not regime type but the accountability structure. Korean democratization in the late 1980s preserved performance-oriented procurement structures from the authoritarian era while adding political accountability, creating a hybrid that rewarded capability delivery rather than risk avoidance.

South Korean defense procurement, even after democratization, operated under clear performance metrics tied to operational readiness. Failure to deliver within timelines triggered consequences for bureaucrats and contractors. Success was rewarded with expanded contracts and advancement; the feedback loop was tight and impersonal.¹⁰

This produced a different set of institutional habits as Korean contractors learned to underpromise and overdeliver, bureaucrats worked to identify and remove bottlenecks, and the system optimized for throughput because throughput was measured and rewarded. The key difference is not the greater threat but that Korean democracy channeled threat perception into performance accountability. Why were they able to do this? Part of the answer lies in how nationalist politics operates. Korean nationalism after the Korean War was existential and performance-focused: the nation survived only if it could defend itself, whereas Indian nationalism after independence was civilizational and status-focused: the nation validated itself through unity and development, while defense had a necessary but subordinate function.

This shaped what voters reward. Today, Indian voters punish governments for visible security failures—terrorist attacks, border crises, and so on—but these punishments focus on leadership competence rather than institutional throughput. Politicians who respond decisively to crises gain credit, while politicians who build thoroughly unsexy institutional capacity do not. Electoral cycles amplify these dynamics. Even long-serving governments have not reorganized around throughput, suggesting the problem lies in incentive structures rather than time horizons. What politicians maximize is not security capability but security credibility, that is, the appearance of strength and decisive response when challenged.

This creates a specific pathology: India invests heavily in platforms that signal strength but underinvests in systems that sustain strength. Aircraft carriers project presence, but it is maintenance infrastructure that enables closure. The former gets inaugurated with media coverage, while the latter remains invisible until its absence becomes embarrassing.

The Quest for Industrial Depth

The political economy that produces only episodic success and stalled compounding in defense is visible across much of the civilian industrial landscape. Outside information technology services and a handful of globally integrated niches, India’s manufacturing sector has struggled for decades to translate scale and labor abundance into genuine industrial depth. The result is not stagnation—output has grown—but a pattern of partial advances without structural transformation.

This gap was the explicit target of the Modi government’s flagship “Make in India” initiative, launched in 2014 with the ambition of raising manufacturing’s share of GDP, creating tens of millions of jobs, and integrating India into global supply chains. The program combined rhetorical emphasis on self-reliance with a mix of regulatory simplification, infrastructure investment, and targeted incentives. A decade on, the results are mixed. Manufacturing output has expanded in absolute terms, and India has attracted new assembly operations. Yet manufacturing’s share of GDP has remained stubbornly flat, and most gains have concentrated in final-stage assembly rather than deep supplier ecosystems. India has become better at hosting factories than at reproducing them.

Nowhere is this clearer than in electronics. India has successfully attracted smartphone assembly lines, including for global brands, and export volumes have risen sharply. But the domestic value-added content of these exports remains limited. Key components—semiconductors, displays, precision machinery—are still imported, and local supplier networks remain thin. As in defense production, success arrives as a discrete achievement rather than a platform for iterative scaling. Each factory is negotiated, incentivized, and defended as a one-off, rather than treated as a repeatable institutional process that generates learning effects across firms and regions.

A similar pattern is visible in heavy manufacturing and infrastructure. India builds highways, ports, and power plants at impressive headline rates, yet execution is uneven and timelines elastic. Projects proceed through fragmented contracting structures, highly complex land acquisition processes, and overlapping regulatory authorities that diffuse responsibility. Delays are normalized, cost escalation is common, and accountability is retrospective rather than performance-oriented. What emerges is capacity without cadence: the ability to build, but not to build predictably, repeatedly, or at falling unit cost.

The persistence of this pattern helps explain why Make in India gradually gave way to a reframing around Atmanirbhar Bharat, or self-reliant India. The rhetorical shift signaled frustration with dependence on global supply chains but did not fundamentally alter the institutional incentives governing execution. Production-linked incentive schemes have succeeded in attracting capital to priority sectors, yet they too rely on discretionary approvals and negotiated outcomes. They reward compliance and output targets, but do little to insulate execution from the political and bureaucratic risks that make delay safer than failure. As in defense procurement, firms learn that surviving audits matters more than compressing timelines.

For a general audience, the key point is that India’s industrial challenge is not one of direction but of compounding. The state can mobilize resources, announce initiatives, and produce visible wins. What it struggles to do—outside protected domains like space, digital infrastructure, and pharmaceuticals—is to lock in feedback loops that turn early success into accelerating capacity. Each program must justify itself anew, each expansion re-cleared politically, each delay absorbed rather than punished. The result is an economy that grows, modernizes, and integrates globally, yet does so without generating the dense industrial ecosystems that underpin first-rate power.

Seen in this light, India’s industrial outcomes are not a puzzle but a mirror. The same accountability structures that discourage risk-taking in defense procurement discourage aggressive scaling in manufacturing. The same federal and bureaucratic fragmentation that distributes political benefits also prevents the emergence of concentrated industrial constituencies capable of demanding speed, standardization, and repetition. And the same tolerance for delay that preserves legitimacy allows underperformance to persist without crisis.

This broader civilian pattern matters because it reinforces the fact that India’s limitations are systemic rather than sectoral. Defense procurement is not an outlier but an extreme case. Until institutional incentives shift from preserving procedural safety to rewarding throughput across domains, India will continue to generate impressive achievements that nonetheless fail to add up to a more decisive, comprehensive configuration of power.

Exceptions That Prove the Rule

These configurations do not operate uniformly. Several domains demonstrate that India achieves sustained cadence when specific conditions align, ones that illuminate what prevents the successful institutionalization of throughput elsewhere.

Space: India’s space program has achieved reliable launches, mission success, and cost effectiveness comparable to international benchmarks. This is because the Indian Space Research Organisation (ISRO) functions with protected technical authority; it operates under the Department of Space, which reports directly to the prime minister’s office. Personnel stability is also higher: senior scientists often spend entire careers within ISRO, allowing tacit knowledge to accumulate. Failures are analyzed as technical problems rather than scandals. When Chandrayaan-2’s lander crashed in 2019, the response was to prepare Chandrayaan-3 rather than investigate officials. Crucially, success is measurable in binary terms. Launches clearly succeed or fail.¹¹

Digital Public Infrastructure: India built two pillars of technological infrastructure, UPI (Unified Payments Interface), and Aadhaar, the country’s unique identification authority, and at remarkable scale with rapid iteration. UPI now accounts for a dominant share of digital payment volumes in India, constituting approximately 85 percent of digital transactions by count.¹² This is because small, technically competent teams operated with executive protection and clear metrics. Performance was measurable in real time: enrollment rates, transaction volumes, and system uptime. The Aadhaar team was led by a chairman, Nandan Nilekani, with cabinet-rank authority and positioned outside normal ministerial hierarchies; it could make decisions in weeks that defense procurement would take years to reach.

Pharmaceuticals: India supplies approximately 40 percent of U.S. generic drug demand.¹³ This is sustained industrial cadence under market discipline as firms that fail go on to lose contracts and face bankruptcy, while successful firms expand. Government involvement is primarily regulatory, and even regulatory delays cannot prevent market forces from rewarding performance.

Elections: The 2024 general election involved 969 million eligible voters and required moving electronic voting machines to very remote locations.¹⁴ Yet the process was completed largely on time because the Election Commission operates with constitutional independence and a clear mandate. Success is binary and public, and personnel are temporarily seconded, preventing the formation of permanent bureaucracies with interests in delay.

These exceptions reveal necessary conditions: institutional insulation from standard audit procedures, clear measurable metrics, personnel stability, and market discipline or executive focus. Where these condi­tions don’t exist (e.g., most defense, heavy manufacturing, and infrastructure sectors), the configurations that hinder performance reassert themselves.

What Makes This Moment Different

If India’s configurations have persisted through multiple crises, it is worth articulating what makes current pressures potentially different. The answer is not that China’s rise imposes acute pain but that it generates a different, more damaging form of embarrassment: informationally visible, peer-competitive, and cumulative in ways that exhaust narrative defenses.

Past crises were absorbed as episodic events that could be narratively managed. The 1962 defeat was attributed to Nehru’s idealism, an issue solvable through personnel change. Kargil demonstrated conventional military effectiveness despite intelligence failures. The 2020–21 border clashes with China produced casualties but avoided escalation, allowing both sides to claim restraint as success. Each crisis generated debate and incremental adjustment, but none forced institutional reorganization because none created conditions where elite self-understanding or justification became untenable. As long as Indian strategic elites could justify capability gaps as choice rather than constraint, as if to say “we could match adversaries if we prioritized differently,” the same configurations persisted.

What distinguishes the current moment is an accumulating pattern made visible through three mutually reinforcing mechanisms: First, informational transparency. Satellite imagery and open-source intelligence make capability comparisons visible in real time. When China builds roads, bridges, and airbases along the border, they are publicly trackable facts. When Indian infrastructure lags, the gap is an observable reality. This transparency erodes space between official claims and actual capability.

Second, industrial scale gaps. China’s defense-industrial output has reached levels that make direct comparison unavoidable. China’s naval shipbuilding output and commissioning tempo are several times greater than India’s, reflecting a sustained industrial scale advantage rather than a focus on isolated platforms.¹⁵ This is systematic superiority across platforms. The gap cannot be attributed to Chinese focus on specific systems while India prioritizes differently, as China leads everywhere simultaneously.

Third, operational persistence. Chinese presence in domains India considers vital has shifted from occasional to routine. The 2020 Ladakh border crisis revealed systematic disadvantages in infrastructure, logistics, and staying power. Chinese forces did not withdraw, instead they remained in position altering the status quo, meaning India achieved a degree of deterrence but not reversal.¹⁶ Together, these mechanisms create what past crises lacked: sustained, publicly available evidence that show how gaps reflect systematic shortcomings, a permanent deficiency rather than temporary choice.

China’s 1995–96 Taiwan Strait experience illustrates how the embarrassment mechanism works. When the United States deployed carrier battle groups, China lacked capacity to contest American naval presence, and the gap was both absolute and publicly visible. More importantly, it struck at core CCP legitimacy claims around national reunification. What followed was institutional reorganization: defense spending increased over the long term, procurement accelerated with greater tolerance for redundancy as cost of learning, and career incentives changed, and shipbuilding moved from episodic to continuous. Could India face analogous conditions and mount a similar response? The question is whether accumulating evidence reaches a threshold where choice explanations lose credibility among elites who matter, not just analysts but political leadership and bureaucratic decision-makers.

Pakistan is unlikely to provide this pressure. Pakistan induces episodic crises, but it is not the sort of peer that would make systematic comparison structurally threatening. China is positioned differently. As a peer whose capabilities can be directly compared, China makes Indian limitations evident through its operational presence and proximity, and every infrastructural comparison or industrial output gap adds to the pattern. Whether this accumulation reaches a point where endurance becomes embarrassing rather than dignified remains uncertain. Three paths forward appear plausible:

(1) Elite consensus reform: generational change and cumulative embarrassment produce political coalitions that make throughput-oriented reorganization possible, accepting short-term costs for long-term capability gains. This would require either generational replacement in key bureaucracies or external shock severe enough to discredit current arrangements, neither of which are imminent.

(2) Partial authoritarian insulation: selective domains receive executive protection and streamlined accountability similar to ISRO and digital infrastructure, achieving throughput in priority sectors while broader configurations persist. This represents the path of least resistance but risks creating islands of competence in a sea of continued sclerosis with uncertain implications for systemwide capacity.

(3) Continued endurance despite relative decline: configurations prove more durable than pressure, with India accepting diminished relative position while maintaining autonomy and avoiding subordination. This remains viable as long as growth continues and China’s pressure stops short of actual conflict, a scenario that depends more on Beijing’s choices than Delhi’s.

Current trends suggest movement toward the second path—selective reforms in priority sectors—rather than systemwide transformation. Whether this partial adaptation proves sufficient depends on how China’s operational presence evolves and whether informational visibility continues making gaps undeniable.

For American planners of Indo-Pacific strategy, India’s endurance configurations suggest both opportunity and constraint. India will remain a valuable partner: its geography matters, its markets matter, its diplomatic weight matters. But expecting India to provide decisive military capabilities in contingencies will almost certainly prove disappointing.

More realistic is planning that accounts for what India can reliably deliver: territorial defense sufficient to complicate Chinese planning, strategic depth preventing encirclement, diplomatic complication for adversaries, and eventually substantial economic weight. What India struggles to provide is sustained closure—the ability to deny access, impose costs, and force outcomes on acceptable terms.

This has implications for burden-sharing expectations. Western states court India with technology transfers, intelligence sharing, and diplomatic support. This reduces immediate pressure for Indian reorganization by providing capabilities India has not built indigenously. But partnership that substitutes for rather than complements indigenous capacity may defer necessary reforms.

The deeper lesson for America is institutional. India demonstrates how democracies can drift into configurations where accountability structures reward risk avoidance rather than performance. This is not an inevitable outcome of democracy but a specific failure mode that both India and America increasingly exhibit. Reversing it requires not just resources but institutional redesign that makes throughput measurable, rewardable, and politically sustainable.

What seems clearer is the cost of continued drift. Retaining the relevance that comes with its size and demography, but without exercising decisive leverage, means that India will continue to shape strategic discussions yet struggle to determine outcomes. This matters most in India’s immediate neighborhood, where Chinese infrastructure and economic dependencies establish presence that is difficult to dislodge.

Constituencies for and against Reform

India may yet reorganize through incremental reform and elite consensus rather than shock. After all, the ingredients do exist, but whether sufficient constituencies will conclude that transformation serves their interests—and whether institutional space exists to translate that conclusion into lasting change—remains questionable. Until then, India will endure, growing economically, modernizing gradually, mattering strategically, but ultimately struggling to harness potential and claim the rank of a first-rate state. In an era when American strategy depends partly on capable partners in Asia, understanding this distinction matters more than narratives of inevitable rise.

What, then, would such constituencies look like in practice? The most plausible pro-reform coalitions in India are not mass movements but narrow, fragmented groupings clustered around growth-oriented segments of the economy and the state. They include parts of the private sector tied to export manufacturing, logistics, and services; technocratic elites within the higher civil services, the central bank and select regulatory agencies; as well as a thin layer of political leadership at the national level that understands the link between state capacity, economic scale, and strategic autonomy. These actors broadly agree on the need for more predictable regulation, faster land and labor adjustment, and a more capable administrative state. What they lack is the numerical weight and organizational coherence to overcome entrenched interests that benefit from the existing equilibrium.

The deeper obstacle, however, is not simply fragmentation but incentive alignment. For much of the political economy, inefficient governance is not an accidental by-product of underdevelopment but a feature that sustains power across the hierarchy. At the top, political and administrative elites benefit from discretion and gatekeeping. Control over licenses, clearances, land, credit, and regulatory interpretation allows coordination through personalized authority rather than impersonal rules, preserving leverage over both capital and subnational actors. Institutional streamlining would reduce this control, shifting power from offices to systems and from brokers to rules—an unattractive trade for those who arbitrate access.

At the bottom of society, the logic is complementary rather than oppositional. Weak, opaque, and overburdened institutions create an environment in which most economic and social transactions are settled through bilateral bargaining: with local officials, party intermediaries, union leaders, or informal power holders. This friction generates rents at every level. For many lower-level actors—whether bureaucrats, political fixers, or organized labor—predictable, automated governance would eliminate opportunities to extract a share of value. Hardship, in this sense, is not just endured but monetized.

The result is a de facto political settlement in which both elites and intermediaries gain from inefficiency, even as aggregate outcomes suffer. Growth can occur within this framework but only up to a point, and only through sectors and firms able to navigate or internalize transaction costs. Calls for “efficiency,” the “ease of doing business,” and so on thus tend to remain technocratic aspirations: rhetorically appealing and analytically coherent but politically underpowered. They ask actors across the system to give up concrete, immediate rents in exchange for diffuse, long-term gains—without a mechanism to enforce reciprocity or compensate losers.

Within the ruling camp, reformist impulses exist but are tightly bound by this settlement. The current government has shown that it can push through discrete, centrally driven initiatives—tax harmonization, infrastructure expansion, selective deregulation—particularly when these can be framed as technocratic fixes or nationalist projects. Yet it remains dependent on electoral coalitions built around redistribution, identity, and protection, limiting its willingness to absorb the short-term political costs of deeper structural change. The preference, as a result, is for executive action and policy improvisation rather than institutional overhaul: visible progress without a reordering of state-society relations.

The opposition, meanwhile, contains experienced administrators who are often more comfortable with the language of institutional reform. But it is fragmented, electorally defensive, and frequently incentivized to outbid the government on welfare promises rather than to champion politically risky changes to labor markets, subsidies, or federal fiscal arrangements. In practice, this leaves no major political force consistently aligned with a reform agenda that prioritizes long-term state capacity over immediate distributional gains.

Bureaucratically, the picture is similarly mixed. India’s higher civil services retain islands of competence and a strong ethos of national stewardship, particularly in finance, diplomacy, and macroeconomic management. These are offset, however, by risk aversion, frequent political interference, and a system that rewards compliance over initiative. Reform-minded officials tend to focus on pilot programs and administrative workarounds rather than pushing for rule changes that would scale success—and expose them to political blowback.

This is the crux of the problem. India is not short of capable indi­viduals or reform ideas. What it lacks is a sufficiently broad and durable coalition that sees institutional transformation—not merely growth or pres­tige—as central to its interests, and that possesses the po­litical leverage to impose costs on those who benefit from stasis. Until such a coalition emerges, India is likely to continue along its current path: resilient, consequential, and incrementally improving, but structur­ally constrained in its ability to convert potential into first-rank power.

This article originally appeared in American Affairs Volume X, Number 1 (Spring 2026): 156–71.

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Notes