India–China cooperation could transform Asia, global economy: Jim O’Neill

Jim O’Neill, the renowned economist credited with coining the 'BRIC' acronym, has once again brought to the forefront the immense potential of emerging economies, specifically highlighting India and China. His statement that India–China economic cooperation could be transformational for Asia and the global economy underscores a significant, albeit complex, geopolitical and economic narrative. This analysis delves into the nuances of O'Neill's assertions, their background, key stakeholders, implications for India, and relevant policy contexts.

The background to O'Neill's statement lies in the shifting global economic landscape. For decades, the US dollar has reigned supreme as the world's primary reserve currency, and developed economies largely dictated global economic trends. However, the rapid growth of economies like China and India over the past two decades has challenged this established order. The BRIC nations (Brazil, Russia, India, China), identified by O'Neill in 2001, were projected to collectively dominate the global economy by 2050. Their continued ascent, despite periodic slowdowns and geopolitical tensions, forms the bedrock of such prognostications. The ongoing discussions about de-dollarization and the increasing economic heft of Asian economies are part of this broader shift.

What O'Neill articulated is a vision where two of Asia's largest economies, despite their historical and ongoing geopolitical friction, could unlock unprecedented economic synergy through cooperation. He posited that India possesses the inherent capacity to achieve a sustained 8% economic growth rate, a figure critical for lifting millions out of poverty and capitalizing on its demographic dividend. However, this potential is contingent upon crucial structural reforms in three pivotal sectors: labour, education, and agriculture. Furthermore, O'Neill's questioning of the long-term dominance of the US dollar signals a growing sentiment among economists and policymakers about a potential transition towards a more multipolar international monetary system.

Key stakeholders in this scenario include the governments of India and China, their respective business communities, international investors, and global financial institutions. For India, the primary stakeholders are its policymakers, who must navigate the intricate path of economic reform while managing geopolitical realities. The Indian workforce, farmers, and students are direct beneficiaries or subjects of the proposed reforms. China, as a major global economic power, plays a crucial role both as a potential economic partner and a geopolitical rival. International bodies like the IMF and World Bank, along with global investors, closely watch these developments as they impact global trade, capital flows, and economic stability.

This matters immensely for India. Achieving sustained 8% growth is not merely an economic target; it's a societal imperative. Such growth is essential for creating millions of jobs needed annually for India's young population, improving social indicators, and funding critical infrastructure development. O'Neill's emphasis on labour, education, and agriculture aligns perfectly with India's long-standing developmental challenges. Reforms in the **labour sector** are crucial for enhancing ease of doing business, attracting investment, and formalizing the vast informal workforce. The Indian Parliament passed four Labour Codes in 2020 (Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety, Health and Working Conditions Code) aiming to consolidate and simplify existing laws, though their full implementation is still pending. These reforms are critical for balancing worker welfare with industrial flexibility. In **education**, the National Education Policy (NEP) 2020 aims to transform India's education system, focusing on skill development, vocational training, and research, which are vital for a knowledge-based economy. **Agriculture**, which employs a significant portion of the Indian population, requires deep-seated reforms to improve farmer incomes, enhance productivity, and modernize supply chains. While the controversial farm laws of 2020 were repealed, the underlying issues of market access, infrastructure, and diversification remain paramount. Agriculture falls largely under the State List (Entry 14, Seventh Schedule, Article 246), but the Union Government plays a significant role through policy initiatives and schemes.

Historically, India's economic journey, particularly post-1991 liberalization, has been marked by a gradual opening up and integration into the global economy. While India has focused on its service sector prowess, China rapidly emerged as the 'world's factory.' The idea of India-China cooperation, despite border disputes and strategic competition (e.g., China's Belt and Road Initiative, which India has largely opposed), presents a fascinating economic counterpoint to geopolitical tensions. Both nations are part of BRICS, a grouping that aims to offer an alternative to Western-dominated global governance structures.

The future implications are profound. If India successfully implements these reforms and achieves its growth potential, it would solidify its position as a major global economic power, further contributing to a multipolar world order. The questioning of dollar dominance points towards a potential diversification of global currency reserves, with currencies like the Chinese Yuan and potentially the Indian Rupee playing a greater role, reducing reliance on a single currency. This could lead to a more balanced and resilient global financial system. However, the path to cooperation between India and China remains fraught with challenges, requiring astute diplomacy and a willingness to separate economic imperatives from geopolitical rivalries. India's ability to leverage its demographic dividend and implement robust structural reforms will be the ultimate determinant of its economic future and its role in transforming the global economy alongside China.