America is going back on all the things that made it great. India's must seize the opportunity

Indian Express

8 hours ago

An autoimmune disease occurs when your body's immune system treats its own healthy tissues as invaders and attacks them. America's policies currently targeting its three powerful muscles — universities, companies and immigration — create short-term pain for India in remittances, student enrolment, manufacturing jobs, foreign investment and exports. While these attacks feel like a passing shower, it's too early to conclude they aren't the climate change of Pax Americana ending. Regardless of how politics unfolds in America, India must seize the long-term economic opportunities by making itself stronger through a 180-day plan for deregulation for employers, decentralisation of power and deepening of human capital.
Some people date Pax Americana — US dominance in the world order — to World War II. I prefer January 1992, when President George H W Bush, referring to the Soviet Union's collapse, said, 'The last year has seen changes of biblical proportions. By the grace of God … a world once divided … now recognises one sole and preeminent power, the United States of America.' Despite this biblical hubris — and 9/11, two wars, a financial crisis and Covid since — the US has dominated in digital innovation, new drugs and stock market growth because it stole the best people in the world, made public investments in basic science and its companies globalised their supply chains. But America is now pouncing on all three.
America's universities are home to 50 per cent of Nobel Prize winners. Funding from the National Institutes of Health contributed to 99 per cent of all drugs approved between 2010 and 2019. In biotech, US government funding accounted for 38 per of total investment in 2024, almost as much as all global venture capital combined. Global consumers of medicine and information technology innovations (chips, internet, and GPS) have benefited from generous US government funding that supported cutting-edge basic science research and grants to academic scientists. Some of the backlash against universities is earned as some intolerant humanities professors with physics envy gift-wrapped their disciplines as social sciences, ignoring Richard Feynman's warning that physics would be impossible if electrons had feelings. This conversion of economics to mathematics, political science to statistics, and sociology/anthropology to racism paralleled a crisis in peer-reviewed, journal-published academic papers around replicability, scalability, and generalisability. It's also unclear whether a private university like Harvard, with an endowment of $50 billion, should take $90,000 per student per year in government funding.
President Donald Trump's economically illiterate advice to Walmart, a hyper-efficient American retailer with 3 per cent profit margins, to 'eat' his import tariffs is a long way from the global supply chains described in the new book Apple in China by Patrick McGee. Ignoring the author's patronising and unfair portrayal of Apple's motivations, the book insightfully demonstrates how the globalisation of manufacturing supply chains became the most significant factor in reducing global poverty by attracting investment, training managers and accelerating productivity. India came late to manufacturing supply chains; only one in 10 of our workers works in a factory. However, China's recent dismissal of Deng Xiaoping's economic genius presents India with a manufacturing opportunity to attract factory refugees despite America's tariff drama.
If demography is destiny, immigration has ensured America doesn't face the problems of Japan (adult diapers outsell baby diapers) or China (Nigeria may have more people by 2060). Approximately 14 per cent of Americans are foreign-born, and immigrants, including their US-born children, account for 27 per cent of the country's population. These numbers conceal the disproportionate contributions of Indian immigrants to new company formation, university teaching, scientific research, technology innovation, and taxes. India's improbable success in two Indian industries — economists never envisioned poor countries exporting software and medicines — benefited from America's skilled worker visa regime and brain circulation. A new book by Srinath Raghavan of Ashoka University on the Indira Gandhi years suggests they represent conjoined crises of hegemony, representation, and governance. This may also explain America's political backlash. Universities became idealists with illusions. The geographic (rural) and sectoral (manufacturing) concentration of wage declines were ignored. Liberals denied that illegal migration would hurt legal migration, a path to citizenship is not necessary for a path to work. And migrants are easier to vilify than technology.
The political popularity of America's economic irrationality — Make America Great Again, feels like Make America White Again —suggests healing will take time. But Indians showing schadenfreude at America's challenges should pause. Despite our short-term pain from the US's actions, its democracy remains the best partner for India's students, emigrants, investment needs and exports. Suppose the government-funded American research engine in basic science suffers. It's hard to imagine the Indian state or pharma, software, and manufacturing companies responding with resources of the same intensity and impact. Let's compare America to the alternative; imagine the tyranny and soullessness of a global order hinged on China.
Every problem is an opportunity. India must capitalise on this one in three ways. First, cut employer compliance, filing and criminal provisions. Second, shift some of Delhi's power (funds, functions and functionaries) to state and city governments. Third, while the troubles of America's Ivy League universities are probably temporary, granting poorna swaraj to IISC, IITs, IIMs, and Ashoka to innovate, disrupt and teach would accelerate their disruption of global university rankings.
All three reforms are hard. But as a song from the movie Pink reminded us, Jo tujh se lipti bediyaan samajh na inko vastra tu/ ye bediyaan pighal ke banale in ko shastra tu (Don't mistake the chains that bind you for clothes/ Melt these chains into weapons). In policy, there is no such thing as being too late, but there is a 'fierce urgency of now'. Success is far from guaranteed but the moment feels auspicious.
The writer is co-founder of Teamlease Services