Another great power in the room? India’s economic rise in the 21st century and the dual economy challenge

Abstract

This article’s main objective is to examine the political economy of the economic reforms implemented in the 1990s and examine the main factors which explain India’s economic rise in the 21st century. We argue that the productive investments and the country’s opening to the global economy have contributed to economic growth, but that this rise leads to the formation of a “dual economy.” Continuing reforms thereby become necessary for India in order to achieve inclusive growth and structural transformation, overcome the dual economy challenge and gain strength in the international system.