June 01, 2019

Troubles Aplenty: Foreign Policy Challenges for the Next Indian Government

Troubles Aplenty: Foreign Policy Challenges for the Next Indian Government



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Summary:  The post-election government in New Delhi—which could see Modi’s return to the helm—will have to confront serious regional and global foreign policy challenges.

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Although Prime Minister Narendra Modi enjoyed a string of foreign policy successes during his term in office, the new government that will be formed in New Delhi—which could witness Modi’s return to the helm—will have to confront serious external challenges both around India’s periphery and farther beyond. Modi has displayed an extraordinary international activism ever since he was elected in 2014. Arguably not since former prime minister Jawaharlal Nehru’s long tenure has India been so engaged in such a wide range of global issues ranging from climate change to strategic realignments—and in so conspicuous a fashion revolving around the sheer personality of the prime minister himself. This activism and its underlying motivations are ultimately grounded in a vision of India as a leading power in the international system: both Nehru and Modi are united by their shared conviction that India is destined for greatness on the global stage, even if the wellsprings of that conception are quite different in each case.

Modi’s successes thus far have undoubtedly been impressive: sustaining the partnership with the United States during the convulsive early months of Donald Trump’s presidency; cementing the relationship with Japan to advance the intra-Asian balancing of China; new outreach toward the Sunni Arab states to realize meaningful forms of political and economic support for India while simultaneously strengthening ties with Israel and preserving relations with Iran; resolving long-standing irritants with Bangladesh to reset friendly ties with a country that India had a critical role in creating; and articulating a persuasive vision of order in the Indo-Pacific that not only binds the United States and India more closely but also opens doors for deeper Indian involvement in a vast swath of the globe from Africa at one end to northeast Asia at the other.

For all these achievements, however, not even Modi could overwhelm Machiavelli’s Fortuna. Even virtuoso leaders inevitably must be backed by the availability of material power if they are to enjoy enduring political success. The record of the last five years suggests that even when Modi did not falter, India’s strategic aims were often frustrated by both contextual constraints and the limitations of its national capabilities. The next government in India, accordingly, will continue to be taxed on both counts while the foreign policy challenges facing New Delhi remain serious and hard to resolve speedily.

Ashley J. Tellis

Ashley J. Tellis holds the Tata Chair for Strategic Affairs and is a senior fellow at the Carnegie Endowment for International Peace, specializing in international security and U.S. foreign and defense policy with a special focus on Asia and the Indian subcontinent.

A successful Indian foreign policy, by definition, is one that creates the external circumstances conducive to realizing India’s fundamental aims, namely, protecting its physical security and its decisional autonomy, enlarging its economic prosperity and its technological capabilities, and realizing its status claims on the global stage. Attaining these objectives requires New Delhi to engage at three different levels abroad: within the subcontinent and its immediate periphery, the intermediate level of the international system populated by various middle powers, and the core of the system where the great powers reside. The next government in India will be confronted by significant tests especially in the first and the last arenas—the most important domains affecting Indian interests—suggesting that the incoming prime minister will have his work cut out for him.


India’s problems within the subcontinent and around its immediate periphery (excluding China) have always been significant—and fundamentally for structural reasons. New Delhi’s critics invariably point to its diplomatic missteps in explaining why India has never been able to vivify its natural primacy in South Asia. Such blunders have frequently occurred—and Modi has had his fair share as exemplified by the failures in Nepal—but they have only exacerbated, not produced, the essential problem.

If the primary objective of Indian foreign policy within and around its subcontinent has been to translate its familiar dominance into a political hegemony that commands the consent, if not the obedience, of its smaller neighbors, that aim has been frequently frustrated by the simple reality that India does not as yet possess the requisite power to shape their strategic choices. India is undoubtedly more capable than every one of its neighbors (bar China) singly, but despite its remarkable economic growth in recent decades, it is still limited by the fact that it has not satisfied the development needs of large sections of its own population. The success of Indian democracy has only ensured that its national resources—no matter how considerable relative to the nearby countries—are predominantly allocated toward meeting internal needs, with only modest assets available for securing external influence. The weaknesses of the Indian state have only complicated this problem: New Delhi has simply been unable to extract the resources necessary for power-political purposes even if these might be notionally available.

India’s economic strategy, thus far, has only made things worse. Shallow reforms have produced weaker economic performance than might otherwise have been possible. Furthermore, by pursuing predominantly inward-looking growth, India has not underwritten the regional assimilation that might have bound its neighbors’ material progress and their political choices to its own success and political preferences as China’s outward integration has comparably succeeded in East and Southeast Asia. Moreover, India’s political order, for all its achievements, is still marred by conspicuous weaknesses and as such has prevented New Delhi from enjoying the fruits of external allegiance that might have possibly accrued were India to have demonstrated an exemplary character. Finally, India’s political diffidence outside its borders, which has been described as strategic restraint, when combined with its material weaknesses, including its military limitations, have prevented New Delhi from being able to wield coercive power effectively. This has left it—despite its large size, significant potential power, and sometimes heavy-handed diplomacy—in the awkward situation of being unable to either overawe its neighbors or induce their submission without serious costs to India’s own well-being.

These constraints are structural, in that they pertain to the underlying forces defining the relations between India and its adjacent states, and they are hard to overcome even if New Delhi consistently pursued the smartest foreign policies imaginable. These limitations constitute the context within which two other factors constrain India’s foreign policy effectiveness further. First, India’s large size and nominal power advantage often unnerves its immediate neighbors and prompts them to look outside the subcontinent for sources of countervailing assistance and support. Second, India’s particular geography presents it with a border with every one of its smaller neighbors—even as these states share no borders with each other—thus making New Delhi the natural magnet for resentments from every corner. When the forces of nationalism and the convulsive domestic politics in each of these South Asian states interact with China’s growing power and its ability to use economic instruments to satisfy their desires for foreign investment and enhanced connectivity in ways that India either cannot or will not, it is not surprising that New Delhi—despite its greater strength—often cannot shape their destinies in ways that would effortlessly advance its own interests.

What has become amply clear by now is that the traditional Indian strategy of protecting its local primacy—seeking to insulate the subcontinent from external influences so that the weaker states would have to defer to superior Indian power—is well and truly dead. Between the realities of globalization, China’s rise as a political actor and economic provider within South Asia, Pakistan’s continuing resistance to Indian primacy, and even the strengthening of U.S. ties with India’s smaller neighbors, these nations find themselves with diverse sources of external support and can undertake actions that may not always comport with India’s objectives. To be sure, in each of these countries, there are constituencies that benefit from closer ties with New Delhi. The natural political contestation that occurs domestically within them, however, produces forces of reaction, thus making the ties with India frequently a subject of acute controversy.

Because India often lacks the economic instruments of influence—deep trade links, significant financial investments, or extensive physical connectivity—and cannot easily utilize its military forces without putting at risk other national goals, New Delhi’s influence even within the Indian subcontinent and its immediate peripheries—in Afghanistan, Burma, the Maldives, Nepal, Pakistan, Sri Lanka, and the Indian Ocean island states—is largely dependent on which political forces are dominant within these countries at any given point in time. When indigenous elements that are partial to India capture the highest offices, Indian fortunes improve; when the forces opposed to India are ascendant, Indian influence suddenly proves evanescent.

The weakness of Indian hegemony, defined as a domination that impels others to accede to New Delhi’s preferences, is thus manifested by the fact the New Delhi has few enduring or overwhelming sources of leverage even in its own immediate region. It lacks both the economic surplus and the strong commercial bonds that would encourage dependency on the part of its smaller neighbors. It certainly remains a power that these states must always reckon with. But, because India’s military forces are blunt instruments and because India’s diplomatic capabilities often cannot by themselves be effective—either when anti-Indian elements capture power in these countries, or when alternative sources of economic assistance and political reassurance are available to them, or when domestic social transformations pull these nations away from India—the extent of Indian influence within its own immediate sphere of interest is often far more wobbly than the distribution of power between India and its neighbors might suggest.

When the new government takes office in New Delhi later this month, it will have to confront this discomfiting reality in full measure. Of all of India’s immediate neighbors, the relationships with the Maldives, Bangladesh, Afghanistan, Burma, and the Indian Ocean island states are currently comfortable, albeit with important qualifications in some cases. Ties with Sri Lanka and Nepal are tentative, and the relationship with Pakistan is downright frosty—with no transformation in sight. In every case where India enjoys good relations with its neighbors, this outcome hinges largely on having friendly governments in place. Unfortunately, success does not yet accrue from a broad Indian penetration of their societies and their economies, which might make their populations actually dependent on India’s goodwill for their prosperity and security. This is true even in those countries where India has important societal links, such as Bangladesh, Nepal, and Sri Lanka. Invariably, even in these countries, as is true elsewhere in the region, their polities are deeply divided; consequently, India’s influence waxes and wanes depending on when elites friendly to New Delhi appear in office.

Thus, for example, India’s current ease with the Maldives derives from the presidency of Ibrahim Mohamed Solih, who, in contrast to his predecessor Abdullah Yameen, has put distance between the Maldives and China and sought to rebuild ties with India instead. Whether this change of fortunes will endure, however, remains an open question and will depend partly on whether New Delhi can assist economic development in the island without saddling it with the crushing financial liabilities that accompanied Chinese investments under Yameen.

Success in Bangladesh derives from Prime Minister Sheikh Hasina Wajed’s reelection: her brand of moderate Islam, her family’s history of friendship with India going back to the country’s founding, and her willingness to address Indian concerns about Islamist terrorism emanating from Bangladesh have elicited New Delhi’s support. As a result of these considerations, India overlooked the tainted poll that returned her to office, perhaps setting itself up for future difficulties should her opponents capture power in the future. In any event, India has in the interim settled territorial differences on generous terms with Dhaka. This exemplifies a strategically sensible effort at cementing ties with a populous neighbor that is also heavily courted by Beijing, especially when China has become both a major investor and the chief foreign source of military supplies to Bangladesh.

India’s gains in Afghanistan have followed a similar pattern. Although India has invested heavily in reaching out to the Afghan people and enjoys extraordinary popular approval because of its development activities—in sharp contrast to Pakistan, which is viewed as an enemy because of its support to the Taliban—New Delhi’s influence ultimately derives from the moderate nationalist elites who are opposed both to Pakistan and to the Islamist insurgents (who also happen to be skeptical of, if not deeply uncomfortable with, India). All these gains, however, are now at risk because of the likelihood that the U.S. exit from Afghanistan will leave behind a regime that permits the Taliban to, at the very least, share power in Kabul.

New Delhi has managed to stabilize ties with Burma primarily by engaging the junta in Naypyitaw in an effort to limit Chinese influence with the regime. This policy has created awkward burdens because it has required India to overlook the Burmese attacks on the Rohingya population, which originally migrated from Bangladesh, now a close friend in South Asia. India has balanced these competing pressures uncomfortably, sacrificing its concerns about democracy and human rights in Burma in favor of preserving working relations with its military leadership. This has enabled New Delhi to protect India’s eastern border against its own separatist movements operating in that vicinity and to utilize Burma as a conduit to continental Southeast Asia in the context of India’s larger “Great Game East” vis-à-vis China. Yet, the persistent success of Indian policy will depend fundamentally on the evolution of Burmese politics, which lies beyond New Delhi’s capacity to control.

India’s successes in the Indian Ocean island states, such as Madagascar, Mauritius, and the Seychelles, have been remarkable in comparison to the challenges it faces closer to home. Despite China persistently wooing these countries and notwithstanding the fact that they will continue to play Beijing and New Delhi off each other, India has managed to secure preferential access in these far-flung territories. The provision of modest military and economic assistance in the context of remarkably adroit diplomacy has enabled India to set up a variety of surveillance facilities intended to monitor Chinese military movements in the Indian Ocean. These are valuable gains, but they are certain to be contested by China given its own competing interests. This makes the struggle for influence in all the island states a long game where India simply cannot afford to rest on its laurels no matter how successful the results are at any given point in time.

Ties with Sri Lanka and Nepal are at the moment complicated and have borne fewer fruit. The current regime in Sri Lanka has sought to preserve decent relations with India, unlike the previous dispensation led by Mahinda Rajapaksa, which took Sri Lanka deeply into China’s orbit. But the political tensions between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe—linked as much to their personal ambitions as they are to Sino-Indian rivalry in Sri Lanka—have prevented Colombo from enjoying the political intimacy that New Delhi had hoped for after Rajapaksa’s defeat in the 2015 election. If, in fact, the Rajapaksa brothers were to return to power in the future, India’s interim gains would once again be at risk to China’s advantage.

Similarly, India’s influence in Nepal today is significantly constrained because the political transition that brought a communist coalition to power in Kathmandu has marginalized India’s traditional partner, the Nepali Congress, and has taken the country into a closer partnership with China. Although India played a critical intermediary role in ending Nepal’s civil war, Modi’s subsequent attempt at exercising coercive power to shape the Nepali constitution—in an effort to protect marginalized groups that have close links to India—ultimately failed. Today, Nepal, much to India’s dismay, seeks to revise the terms of the bilateral 1950 Peace and Friendship Treaty, aiming to eliminate the standing constraints on its sovereignty. The Nepali example again demonstrates that India’s foreign policy preferences, even in its own neighborhood, can be frustrated even by smaller powers because of their relatively autonomous internal political dynamics, their ability to rely on more powerful external entities such as China, and their ability to mobilize sections of their populations against India on occasion—all at a time when Indian economic, military, and diplomatic influence cannot be applied easily.

India’s problems with Pakistan remain an extreme example in this regard. Pakistan’s history of separation from India makes it an ideologically and politically obdurate rival. Despite its dismal history of failed confrontations with India, Pakistan is locked into an implacable resistance even though its opposition has cost it economically, politically, and socially. The dominance of the Pakistan Army within the state has transferred the service’s embittered ethos to Pakistan’s relations with India as a whole: in the nuclear era, this has resulted in persistent efforts to weaken its larger neighbor through unending subconventional wars conducted under the mantle of plausible deniability. To date, India has not found a satisfactory solution to this conundrum. Compared to its other neighbors in South Asia, India enjoys a much weaker power advantage over Pakistan, and that has not helped matters either.

Neither Modi nor his predecessors have been able to resolve the problems posed by Pakistan’s nuclear-shadowed revisionism, in part because there are no significant domestic constituencies in Pakistan that could be utilized to build a partnership with New Delhi. Although some Pakistani prime ministers interested in this outcome have episodically appeared on the scene—Nawaz Sharif being the most conspicuous, with Imran Khan currently providing some indications that he might be too—their ability to act constructively has always been impeded by the veto-wielding Pakistan Army. To his credit, Modi, like many Indian prime ministers before him, also attempted to forge a rapprochement with Islamabad but has fallen short because of the absence of an enlightened—and powerful enough partner—at the opposite end. Consequently, short of a domestic transformation within Pakistan, it is unlikely that India will ever be able to decisively remedy this state of affairs, thus leaving the next government in New Delhi with only better or worse ways of managing a problem that will persist far into the future. It is almost certain that India will resuscitate the currently stalled diplomatic dialogue with Pakistan at some point after the current election, but even this process is unlikely to produce any lasting peace in the subcontinent.

The evidence, on balance, thus suggests that even within and immediately around the Indian subcontinent, India’s natural preeminence does not translate into anything resembling hegemony. In the first instance, this incapacity derives from India’s material weaknesses and its failure to penetrate the societies and especially the economies of its neighbors. The limitations of its military instruments and its diffidence in wielding coercive power act as further constraints, especially when the Indian political order does not yet suffice as an effective source of soft power. All these factors have combined to make India largely dependent on the support of neighboring elites—who either share its political vision or are drawn to it in pursuit of their own interests—for its geopolitical successes within the greater South Asian region.

These structural problems cannot be remedied by spectacular symbolism, as Modi has repeatedly attempted throughout his tenure. These gestures may help on occasion to create new political opportunities or to reinforce some favorable underlying trends. But absent a decisive advantage in relative power and the ability to apply it in felicitous ways, even bold diplomatic gambles are likely to fall short in securing for India the local hegemony and global relevance that it has sought since its independence. What is required, therefore, more than ever is a long-term effort that focuses on accelerating the growth of Indian power at home and deepening the webs of interdependence between India and its neighbors, which would serve common interests and ultimately enlarge New Delhi’s influence in a vitally important arena for India.


If India’s immediate environs are still challenging, because they host continuing threats as well as unrealized opportunities, the intermediate space in the international system has proven much kinder to New Delhi in recent years. India’s relations with most of the key middle powers have not only witnessed dramatic improvements, but the Modi government was also able to utilize these ties to advance perennial Indian goals: assisting its economic growth, improving its technological capabilities, boosting its quest for status, and securing support for geopolitical balancing. India’s partnership with Japan heads the list on all four counts, as growing Japanese investments in India, its injections of technology in critical sectors such as transportation, its partnership in support of permanent membership of the UN Security Council, and its collaboration in creating an evolving intra-Asian balance to China demonstrate what India’s relations with the middle powers can yield when at their best.

India’s ties with Germany, South Korea, and the United Kingdom, similarly support New Delhi’s objectives in enhancing its economic and technological growth. Likewise, Modi’s successful outreach to the United Arab Emirates and Saudi Arabia has enhanced India’s quest for stable energy supplies and increased foreign investment while also limiting their traditional support for Pakistan, in fact eliminating that backing in the face of Rawalpindi’s continued terrorism against India. Within the Indo-Pacific region, Singapore, Indonesia, and Australia have proven important both for economic and geopolitical reasons, with Vietnam also rising in significance because of its common concerns about China. For all these successes, however, India’s outreach to Pacific Asia has faltered because its economic policies have stymied its commercial integration with this region. The curmudgeonly Indian attitude to the ongoing negotiation of the Regional Comprehensive Economic Partnership has highlighted once again its diffidence about international trade—the currency of relevance in these parts—and its still modest power projection capabilities have prevented New Delhi from becoming relevant to mitigating the strategic threats posed by China in East and Southeast Asia.

Russia, Israel, and France play an outsize role in India’s search for advanced military technologies, but, much to India’s chagrin, Moscow today has ceased to be a reliable partner in balancing China within Asia. Indian commentators frequently criticize U.S. policy for “pushing” Russia into China’s arms, but, irrespective of that criticism’s merits, Russia now views the relationship with China as being far more important than that with India. The fundamental reality is that India has little to offer Russia today, apart from being a customer of Russian military technology for its conventional forces and its strategic programs. Both these dependencies are still significant and, as a consequence, Indian leaders have often struggled to find convergence with Moscow on peripheral issues such as the common quest for multipolarity or increasing the relevance of the Shanghai Cooperation Organization and the Eurasian Union. On the most important matters, however—such as the future of Afghanistan or the imperative of balancing China—New Delhi and Moscow are in fact far apart, and it is unlikely that even brilliant diplomacy by the next Indian government will be able to bridge the chasms that have now opened up in Indo-Russian relations.

The saving grace, however, is that India’s lackluster relations with Russia constitute perhaps the only significant weakness in its ties with the middle powers that really matter to India. But this cannot be great consolation where India’s foreign policy aims are concerned. After all, even robust relations with the middle powers—despite their importance—cannot compensate for the weaknesses that hobble India’s effectiveness within South Asia nor can they overcome the hazards now posed by the great powers to India’s interests.


There are only two great powers currently resident at the core of the global system, China, an emerging great power, and the United States, the long-established hegemon. Unfortunately, the next government in India will have to cope with two different kinds of problems where the great powers are concerned: strategic threats posed by Beijing, which only promise to grow in intensity for a long time to come, and geopolitical fickleness on the part of the United States, which will repeatedly call into question New Delhi’s gamble to rely on Washington for help with balancing China. Hopefully for India, the problems with the United States may be self-limiting, if Trump either chooses to treat India differently or is replaced by a more strategic leader once he departs from office.

The challenges embodied by China, however, are more enduring because its rise, despite likely slowing, will make Beijing a formidable problem for New Delhi indefinitely. China recognized, almost since the moment of its modern founding, that India represented one of the three major Asian threats to its quest for recovering continental, if not global, preeminence. Since Sino-Indian relations soured over territorial disputes in the 1950s, Beijing has consistently pursued the objective of containing India, which appeared most dangerous when it collaborated with more powerful Chinese rivals such as the United States or the Soviet Union. Accordingly, Chinese strategy toward India focused simply on limiting Indian power even as it consistently feigned indifference to New Delhi.

The preferred instrument for that containment was Pakistan, which China has supported since the 1960s with economic and military assistance, to include eventually the transfer of nuclear weapon designs, materials, and technologies. This last contribution was critical because it enabled Beijing to exploit Pakistan’s intense rivalry with India to lock New Delhi down in a local security competition on the subcontinent—a struggle that would sap India’s strength and prevent it from becoming the major Asian or global player to challenge China. Even as Beijing covertly pursued this strategy of distracting India, it sought modest forms of bilateral cooperation with New Delhi whenever possible, in the process strengthening those constituencies within India who argued for rapprochement with China rather than efforts to balance it (if necessary, in cooperation with other great powers). India’s poor economic performance for most of its independent life and its ideological divisions at home played right into this Chinese strategy.

Today, when China has become a global economic power and when India’s ascendency is also perceptible, Beijing has supplemented its traditional strategy centered on Pakistan by more intensely penetrating South Asia and the wider Indian Ocean region at large, seeking to build privileged relations with India’s smaller neighbors in ways that only diminish its local influence. New Delhi’s inability to serve as an alternative font of economic integration and foreign assistance has made this newest turn in Chinese strategy vis-à-vis India more effective than it otherwise might have been.

Ever since the end of the Cold War, successive Indian governments have attempted to neutralize this Chinese strategy by adopting a multidimensional approach: implementing domestic economic reforms to underwrite internal balancing; modernizing the Indian military and enlarging its area of responsibility; conciliating the smaller neighbors both on the subcontinent and in its oceanic environs; and preserving a modicum of cooperation with Beijing even as New Delhi seeks to balance it externally by, most importantly, pursuing a new strategic partnership with Washington, supplemented by an Act East policy that seeks to deepen ties with the East and Southeast Asian states that also happen to be China’s neighbors. None of these elements, however, has come to full fruition as yet.

The relationship with the United States, in particular, still remains hostage to the anxieties in Indian domestic politics. All three prime ministers, Atal Bihari Vajpayee, Manmohan Singh, and Narendra Modi—given their keen appreciation of China’s injurious strategy toward India—understood Washington’s centrality in New Delhi’s external balancing of Beijing. Singh, in particular, following in Vajpayee’s footsteps, laid the foundations for a deepened bilateral partnership with the United States. Modi, for his part, skillfully navigated the last two years of Barack Obama’s administration to sustain that engagement in ways that brought great dividends for India in regard to both access to advanced technology and support for its great power ambitions. After the Sino-Indian crisis at Doklam—ironically when Washington offered New Delhi quiet but unstinted support—Modi became more cautious about visibly tilting toward the United States and publicly confronting China, partly because he wanted to avoid recurrent crises with Beijing in the lead up to the Indian elections.

The manner in which Modi has handled subsequent disputes with the United States over, for example, the S-400 purchase from Russia, Trump’s tariffs on Indian goods and his threat to end Indian privileges under the Generalized System of Preferences, Washington’s pressure on New Delhi to end its oil imports from Iran, and the threats posed by a possibly hasty U.S. exit from Afghanistan suggest that Modi remains wedded to deepening ties with the United States in order to meet the major challenge posed by China and to advance long-standing Indian ambitions within South Asia and globally.

On this score, however, he has not received much help from his compatriots. It is in fact remarkable to see substantial sections of the Indian intellectual left pillorying Modi for his efforts at strengthening ties with the United States, despite the fact that India has been a beneficiary of extraordinary American generosity for close to two decades now. That India should avoid any alignment with the United States because it might compromise its strategic autonomy, inveigle India in possible U.S. conflicts with China, or entrench Beijing as a permanent adversary are all arguments bandied about in New Delhi without reference to reality. Moreover, they are often grounded oddly on the assumption that India can satisfactorily balance the rise of China independently (despite the absence of evidence), that India can better secure Chinese concessions on its core interests if its ties to the United States are minimized (when the historical record proves exactly the opposite), or that the United States threatens India’s long-term interests as much as China does (often doubting whether the latter does at all).

Even the nationalist right often reaches similar conclusions but through different routes. Secular right-wing commentators argue, often with suspect corroboration, that India’s economic and technological capabilities are weighty enough to permit New Delhi to successfully balance against China through internal means alone, and hence a strategic partnership with the United States is unnecessary. Meanwhile, some who lay stress on cultural constructs in international politics contend that China and India, being great civilizations, have the innate capacity to manage their differences bilaterally—since the disagreements are not axiological but only power-political—which therefore renders New Delhi’s necessity for external balancing, including with the United States, both dispensable and arguably even counterproductive.

For the moment, none of these claims have particularly impressed Modi, who has pursued his strategy of aligning with the United States undeterred by domestic criticism. Even left-leaning parties, like the Indian National Congress or its regional variants, are likely to pursue similar policies if they form the next government, though their ardor for resolute external balancing with U.S. assistance remains an open question.

The unforgettable element underlying all these debates, however, is that the Indian body politic is deeply conflicted about entering into any kind of alignments with foreign powers, especially the United States. Whether this ambivalence is rooted in an exaggerated assessment of India’s own capabilities, an underestimation of the threats posed by China, a zealous desire to protect India’s freedom of action in international politics, a conviction that India’s strategic significance ensures that no great power would permit its loss to others, or a disinclination to treat strategic problems seriously in the face of competing domestic challenges, the end result is the same. The impetus for a concerted strategic partnership with the United States invariably derives from the vision and personality of the leader at the apex—Vajpayee, Singh, or Modi—rather than from a felt need by the populace at large. In this respect, India is fundamentally different from countries like Israel or Pakistan.

Sustaining a meaningful geopolitical affiliation with Washington, therefore, hinges heavily on the personal choices of India’s prime ministers supported by a few trusted advisers—often against the weight of opposition emanating from vocal domestic constituencies. Trump’s America First foreign policy has been unhelpful to this effort. In a noticeable departure from the strategic altruism displayed by the George W. Bush and Obama administrations toward India, Trump has pursued a more transactional approach, attempting to coerce India into complying with U.S. demands on a variety of issues ranging from market access to relations with third countries.

There is no doubt that India’s constrained trade openness has left it vulnerable to the often-justified American complaints about New Delhi’s economic policies. But the Trump administration’s targeting of India—which is of a piece with its larger trade war against the international community, including U.S. allies—raises doubts in the minds of Indian leaders as to whether the United States can be a trusted confederate in India’s efforts to balance China if, despite all the valuable strategic engagement, it is simultaneously treated as a target of coercive U.S. economic policies. The current trade disputes with the United States, therefore, have the potential not only to undermine the developing bilateral intimacy necessary for the successful balancing of China but to actually embarrass the Indian prime ministers who have bet on Washington in the face of considerable domestic skepticism.

The uncomfortable reality, therefore, as far as India’s engagement with the core of the global system is concerned—the most important strategic arena for New Delhi outside its own neighborhood—is that the incoming government will find its ties with both Beijing and Washington to be unsettled concurrently. Restoring a desirable equilibrium will require the next Indian prime minister to continue to invest in a strong partnership with the United States despite the vagarious policies pursued by Washington, and that is a tall order, given the headwinds inherent in Indian domestic politics. Moreover, preserving cooperative relations with China is also essential, if for no other reason than to reduce Beijing’s incentives to cause trouble for New Delhi in South Asia and beyond. Preserving this asymmetric balance, which involves deepening ties with Washington while simultaneously minimizing the offense to Beijing, will remain a continuing challenge for India’s new government, especially when China appears far more predictable and conciliatory than the United States.


That India’s external engagements have yielded important gains during the last five years remain a tribute to Modi’s international activism and the sterling efforts of the Indian Foreign Service, which, despite its small size, has usually managed to punch above its weight. Yet the environment around India remains unsettled in diverse ways. The evidence suggests that India is still unable to shape its surroundings, both near and afar, to suit its interests, sometimes because of failed initiatives but, more fundamentally, because it still lacks the material capacities and the appropriate kinds of penetration abroad that would induce greater support for its objectives by others.

The limitations of India’s foreign policy are thus linked intimately to its weaknesses at home. If India is to realize its great power ambitions in the decades to come, the next government will have to accelerate economic reforms domestically, strengthen India’s institutions, preserve its constitutional ethos, and protect the nation’s internal cohesion, all of which have floundered dangerously in recent years. At a time when India’s external environment has grown more precarious because of the weakening liberal international order, China’s continuing ascendancy and assertiveness, and the prevailing capriciousness in Washington, continued stumbles in New Delhi will end up being cumulatively costly and will subvert India’s larger ambitions even more consequentially. Today, when India’s claims to exceptionalism will not suffice to either protect its security or to increase its influence, its missteps within will have outsized impact abroad.

May 30, 2019

How Narendra Modi conquered caste in 2019 elections

Lack of Muslim support for the BJP, Aadhaar-enabled direct cash transfers, EWS quota and the national security pitch contributed to diminished role of caste

The BJP starts with a significant disadvantage of lack of Muslim support. While the party is itself responsible for this problem, it nevertheless has to work harder among the rest of the population to win a constituency(Bloomberg)

Updated: May 29, 2019 19:38 IST

By Kunal Singh, Hindustan Times

Narendra Modi’s re-election and its sheer scale has challenged many truisms of Indian politics. The biggest question that has emerged is: Is the role of caste dwindling in Indian elections? It might be too early to answer the question definitively. One will need to observe subsequent assembly and Lok Sabha results to establish a firm trend. However, there are signs that caste played a diminished role in 2019 elections. The Bharatiya Janata Party (BJP) has won massive mandates in many states across India. As many as 15 states and the union territory of Delhi have returned more than 50% vote share for Modi’s party in the seats that it contested. In four more states, the BJP has notched up vote shares between 40% and 50%.

In a first past the post poll system involving a multipolar contest, it is often enough to secure around 30% votes to win a constituency. This has allowed political parties to cultivate just one or two castes or communities to win a seat in the legislative bodies. India’s poor performance in the delivery of public goods is also a by-product of this system — patronage distribution for select groups has proven to be sufficient for parties facing the electorate. But the BJP’s vote percentages show that it has been able to build large, cross-caste coalitions in many states. Four different factors are contributing to this phenomenon.

First, the BJP starts with a significant disadvantage of lack of Muslim support. While the party is itself responsible for this problem, it nevertheless has to work harder among the rest of the population to win a constituency. The need for Hindu consolidation increases even more when Opposition parties enter into an alliance as they did in the state of Uttar Pradesh (UP). Samajwadi Party (SP) is traditionally known to bank upon Other Backward Classes (OBCs) and Muslims, and the Bahujan Samaj Party (BSP) has had a firm grip on Dalit votes. In order to win UP — both at the state and the Centre — the BJP had to prise non-Yadav OBC votes away from the SP and non-Jatav Dalit votes away from the BSP. Given the BJP’s performance in 2019 — 50.8% vote share on the seats it contested in the state — it won’t be surprising if a significant number of Yadavs and Jatavs too voted for the party.

Second, the Modi-led National Democratic Alliance (NDA) government has decisively shifted to delivery of welfare benefits through Aadhaar directly into bank accounts of beneficiaries. This move has cut out the role of an intermediate layer of bureaucracy that practised patronage politics, in which a few castes benefitted disproportionately. This was the actual rationale behind the idea of Aadhaar as welfare benefits were prone to significant leakages. Even though Aadhaar was the brainchild of the United Progressive Alliance government, its rollout for welfare delivery was massively accelerated by the NDA government.

Third, the Modi-led NDA government brought in specific policies and schemes which further diluted the role of caste. The biggest move was the quota for the economically weaker sections (EWS) that was introduced through a Constitutional amendment in January this year. Through the EWS quota, as Rajeev Mantri and Harsh Gupta wrote in these pages, the government emphasised that “economic backwardness in and of itself is a sufficient criterion for government mandated affirmative action; it is not social identity alone that determines welfare”. Other successful schemes too focused on identities other than caste. For instance, the Ujjwala scheme to provide LPG cylinders to poor households benefitted women from all castes and communities.

Fourth, the sheer popularity of Modi was itself a huge determinant of this election. The image of Modi as a decisive and strong leader is something that has massive appeal across identities. He is seen as a leader who delivers robustly on national security and has enhanced the image of India in the international community. It is true that serious scholars question the slow process of defence modernisation. Even the efficacy of the Balakot airstrikes is far from settled. However, the masses are convinced that Modi is the protector of India’s sovereign and security interests. National security, it must be remembered, is the ultimate public good. It is non-rivalrous, that is, consumption of national security by one individual (or caste) doesn’t leave less of it for another individual (or caste). More importantly, it is non-excludable, that is, no individual or group (or caste) can be excluded from enjoying the benefits of national security.

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Given these factors at play, it is no surprise that Modi was able to build large cross-caste coalitions in so many states. The role of caste may not have completely vanished but a set of circumstances, leadership and policy choices definitely contributed to diminishing its importance in the 2019 elections. Whether this trend continues or not will be interesting to see.


Source: Hindustan Times

Notes from the AI frontier: Applications and value of deep learning

McKinsey Global Institute

Notes from the AI frontier: Applications and value of deep learning

April 2018 | Discussion Paper

By Michael ChuiJames Manyika, Mehdi Miremadi, Nicolaus Henke, Rita Chung, Pieter Nel, and Sankalp Malhotra

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An analysis of more than 400 use cases across 19 industries and nine business functions highlights the broad use and significant economic potential of advanced AI techniques.


Discussion Paper (PDF-446KB)

Artificial intelligence (AI) stands out as a transformational technology of our digital age—and its practical application throughout the economy is growing apace. For this briefing, Notes from the AI frontier: Insights from hundreds of use cases(PDF–446KB), we mapped both traditional analytics and newer “deep learning” techniques and the problems they can solve to more than 400 specific use cases in companies and organizations. Drawing on McKinsey Global Institute research and the applied experience with AI of McKinsey Analytics, we assess both the practical applications and the economic potential of advanced AI techniques across industries and business functions. Our findings highlight the substantial potential of applying deep learning techniques to use cases across the economy, but we also see some continuing limitations and obstacles—along with future opportunities as the technologies continue their advance. Ultimately, the value of AI is not to be found in the models themselves, but in companies’ abilities to harness them.

It is important to highlight that, even as we see economic potential in the use of AI techniques, the use of data must always take into account concerns including data security, privacy, and potential issues of bias.

Mapping AI techniques to problem typesInsights from use casesSizing the potential value of AIThe road to impact and value

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Mapping AI techniques to problem types

As artificial intelligence technologies advance, so does the definition of which techniques constitute AI. For the purposes of this briefing, we use AI as shorthand for deep learning techniques that use artificial neural networks. We also examined other machine learning techniques and traditional analytics techniques (Exhibit 1).

Exhibit 1

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Neural networks are a subset of machine learning techniques. Essentially, they are AI systems based on simulating connected “neural units,” loosely modeling the way that neurons interact in the brain. Computational models inspired by neural connections have been studied since the 1940s and have returned to prominence as computer processing power has increased and large training data sets have been used to successfully analyze input data such as images, video, and speech. AI practitioners refer to these techniques as “deep learning,” since neural networks have many (“deep”) layers of simulated interconnected neurons.

We analyzed the applications and value of three neural network techniques:

Feed forward neural networks: the simplest type of artificial neural network. In this architecture, information moves in only one direction, forward, from the input layer, through the “hidden” layers, to the output layer. There are no loops in the network. The first single-neuron network was proposed already in 1958 by AI pioneer Frank Rosenblatt. While the idea is not new, advances in computing power, training algorithms, and available data led to higher levels of performance than previously possible.Recurrent neural networks (RNNs): Artificial neural networks whose connections between neurons include loops, well-suited for processing sequences of inputs. In November 2016, Oxford University researchers reported that a system based on recurrent neural networks (and convolutional neural networks) had achieved 95 percent accuracy in reading lips, outperforming experienced human lip readers, who tested at 52 percent accuracy.Convolutional neural networks (CNNs): Artificial neural networks in which the connections between neural layers are inspired by the organization of the animal visual cortex, the portion of the brain that processes images, well suited for perceptual tasks.

For our use cases, we also considered two other techniques—generative adversarial networks (GANs) and reinforcement learning—but did not include them in our potential value assessment of AI, since they remain nascent techniques that are not yet widely applied.

Generative adversarial networks (GANs) use two neural networks contesting one other in a zero-sum game framework (thus “adversarial”). GANs can learn to mimic various distributions of data (for example text, speech, and images) and are therefore valuable in generating test datasets when these are not readily available.

Reinforcement learning is a subfield of machine learning in which systems are trained by receiving virtual “rewards” or “punishments”, essentially learning by trial and error. Google DeepMind has used reinforcement learning to develop systems that can play games, including video games and board games such as Go, better than human champions.


Problem types and their definitions

In a business setting, these analytic techniques can be applied to solve real-life problems. The most prevalent problem types are classification, continuous estimation and clustering. A list of problem types and their definitions is available in the sidebar.

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Insights from use cases

We collated and analyzed more than 400 use cases across 19 industries and nine business functions. They provided insight into the areas within specific sectors where deep neural networks can potentially create the most value, the incremental lift that these neural networks can generate compared with traditional analytics (Exhibit 2), and the voracious data requirements—in terms of volume, variety, and velocity—that must be met for this potential to be realized. Our library of use cases, while extensive, is not exhaustive, and may overstate or understate the potential for certain sectors. We will continue refining and adding to it.

Exhibit 2

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Examples of where AI can be used to improve the performance of existing use cases include:

Predictive maintenance: the power of machine learning to detect anomalies. Deep learning’s capacity to analyze very large amounts of high dimensional data can take existing preventive maintenance systems to a new level. Layering in additional data, such as audio and image data, from other sensors—including relatively cheap ones such as microphones and cameras—neural networks can enhance and possibly replace more traditional methods. AI’s ability to predict failures and allow planned interventions can be used to reduce downtime and operating costs while improving production yield. For example, AI can extend the life of a cargo plane beyond what is possible using traditional analytic techniques by combining plane model data, maintenance history, IoT sensor data such as anomaly detection on engine vibration data, and images and video of engine condition.AI-driven logistics optimization can reduce costs through real-time forecasts and behavioral coaching. Application of AI techniques such as continuous estimation to logistics can add substantial value across sectors. AI can optimize routing of delivery traffic, thereby improving fuel efficiency and reducing delivery times. One European trucking company has reduced fuel costs by 15 percent, for example, by using sensors that monitor both vehicle performance and driver behavior; drivers receive real-time coaching, including when to speed up or slow down, optimizing fuel consumption and reducing maintenance costs.AI can be a valuable tool for customer service management and personalization challenges. Improved speech recognition in call center management and call routing as a result of the application of AI techniques allow a more seamless experience for customers—and more efficient processing. The capabilities go beyond words alone. For example, deep learning analysis of audio allows systems to assess a customers’ emotional tone; in the event a customer is responding badly to the system, the call can be rerouted automatically to human operators and managers. In other areas of marketing and sales, AI techniques can also have a significant impact. Combining customer demographic and past transaction data with social media monitoring can help generate individualized product recommendations. “Next product to buy” recommendations that target individual customers—as companies such as Amazon and Netflix have successfully been doing--can lead to a twofold increase in the rate of sales conversions.

Two-thirds of the opportunities to use AI are in improving the performance of existing analytics use cases

In 69 percent of the use cases we studied, deep neural networks can be used to improve performance beyond that provided by other analytic techniques. Cases in which only neural networks can be used, which we refer to here as “greenfield” cases, constituted just 16 percent of the total. For the remaining 15 percent, artificial neural networks provided limited additional performance over other analytics techniques, among other reasons because of data limitations that made these cases unsuitable for deep learning (Exhibit 3).

Exhibit 3

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Greenfield AI solutions are prevalent in business areas such as customer service management, as well as among some industries where the data are rich and voluminous and at times integrate human reactions. Among industries, we found many greenfield use cases in healthcare, in particular. Some of these cases involve disease diagnosis and improved care, and rely on rich data sets incorporating image and video inputs, including from MRIs.

On average, our use cases suggest that modern deep learning AI techniques have the potential to provide a boost in additional value above and beyond traditional analytics techniques ranging from 30 percent to 128 percent, depending on industry.

Visualizing the potential impact of AI and advanced analytics

Our interactive data visualization shows the potential value created by artificial intelligence and advanced analytics techniques for 19 industries and nine business functions.

View the interactive

In many of our use cases, however, traditional analytics and machine learning techniques continue to underpin a large percentage of the value creation potential in industries including insurance, pharmaceuticals and medical products, and telecommunications, with the potential of AI limited in certain contexts. In part this is due to the way data are used by these industries and to regulatory issues.

Data requirements for deep learning are substantially greater than for other analytics

Making effective use of neural networks in most applications requires large labeled training data sets alongside access to sufficient computing infrastructure. Furthermore, these deep learning techniques are particularly powerful in extracting patterns from complex, multidimensional data types such as images, video, and audio or speech.

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How do AI companies think about data strategy and competition

Artificial intelligence requires large amounts of quality data. Coursera cofounder Andrew Ng explains how AI companies are acquiring, organizing, and using big data to create value.

Deep-learning methods require thousands of data records for models to become relatively good at classification tasks and, in some cases, millions for them to perform at the level of humans. By one estimate, a supervised deep-learning algorithm will generally achieve acceptable performance with around 5,000 labeled examples per category and will match or exceed human level performance when trained with a data set containing at least 10 million labeled examples. In some cases where advanced analytics is currently used, so much data are available—million or even billions of rows per data set—that AI usage is the most appropriate technique. However, if a threshold of data volume is not reached, AI may not add value to traditional analytics techniques.

These massive data sets can be difficult to obtain or create for many business use cases, and labeling remains a challenge. Most current AI models are trained through “supervised learning”, which requires humans to label and categorize the underlying data. However promising new techniques are emerging to overcome these data bottlenecks, such as reinforcement learning, generative adversarial networks, transfer learning, and “one-shot learning,” which allows a trained AI model to learn about a subject based on a small number of real-world demonstrations or examples—and sometimes just one.

Organizations will have to adopt and implement strategies that enable them to collect and integrate data at scale. Even with large datasets, they will have to guard against “overfitting,” where a model too tightly matches the “noisy” or random features of the training set, resulting in a corresponding lack of accuracy in future performance, and against “underfitting,” where the model fails to capture all of the relevant features. Linking data across customer segments and channels, rather than allowing the data to languish in silos, is especially important to create value.

Notes from the AI frontier: Insights from hundreds of use cases

Download the discussion paper

Realizing AI’s full potential requires a diverse range of data types including images, video, and audio

Neural AI techniques excel at analyzing image, video, and audio data types because of their complex, multidimensional nature, known by practitioners as “high dimensionality.” Neural networks are good at dealing with high dimensionality, as multiple layers in a network can learn to represent the many different features present in the data. Thus, for facial recognition, the first layer in the network could focus on raw pixels, the next on edges and lines, another on generic facial features, and the final layer might identify the face. Unlike previous generations of AI, which often required human expertise to do “feature engineering,” these neural network techniques are often able to learn to represent these features in their simulated neural networks as part of the training process.

Along with issues around the volume and variety of data, velocity is also a requirement: AI techniques require models to be retrained to match potential changing conditions, so the training data must be refreshed frequently. In one-third of the cases, the model needs to be refreshed at least monthly, and almost one in four cases requires a daily refresh; this is especially the case in marketing and sales and in supply chain management and manufacturing.

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Sizing the potential value of AI

We estimate that the AI techniques we cite in this briefing together have the potential to create between $3.5 trillion and $5.8 trillion in value annually across nine business functions in 19 industries. This constitutes about 40 percent of the overall $9.5 trillion to $15.4 trillion annual impact that could potentially be enabled by all analytical techniques (Exhibit 4).

Exhibit 4

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Per industry, we estimate that AI’s potential value amounts to between one and nine percent of 2016 revenue. The value as measured by percentage of industry revenue varies significantly among industries, depending on the specific applicable use cases, the availability of abundant and complex data, as well as on regulatory and other constraints.

These figures are not forecasts for a particular period, but they are indicative of the considerable potential for the global economy that advanced analytics represents.

From the use cases we have examined, we find that the greatest potential value impact from using AI are both in top-line-oriented functions, such as in marketing and sales, and bottom-line-oriented operational functions, including supply chain management and manufacturing.

Consumer industries such as retail and high tech will tend to see more potential from marketing and sales AI applications because frequent and digital interactions between business and customers generate larger data sets for AI techniques to tap into. E-commerce platforms, in particular, stand to benefit. This is because of the ease with which these platforms collect customer information such as click data or time spent on a web page and can then customize promotions, prices, and products for each customer dynamically and in real time.

Exhibit 5

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Here is a snapshot of three sectors where we have seen AI’s impact: (Exhibit 5)

In retail, marketing and sales is the area with the most significant potential value from AI, and within that function, pricing and promotion and customer service management are the main value areas. Our use cases show that using customer data to personalize promotions, for example, including tailoring individual offers every day, can lead to a one to two percent increase in incremental sales for brick-and-mortar retailers alone.In consumer goods, supply-chain management is the key function that could benefit from AI deployment. Among the examples in our use cases, we see how forecasting based on underlying causal drivers of demand rather than prior outcomes can improve forecasting accuracy by 10 to 20 percent, which translates into a potential five percent reduction in inventory costs and revenue increases of two to three percent.In banking, particularly retail banking, AI has significant value potential in marketing and sales, much as it does in retail. However, because of the importance of assessing and managing risk in banking, for example for loan underwriting and fraud detection, AI has much higher value potential to improve performance in risk in the banking sector than in many other industries.

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The road to impact and value

Play Video


A minute with the McKinsey Global Institute: What AI can and can’t (yet) do

There have been many exciting breakthroughs in AI recently—but significant challenges remain. Partner Michael Chui explains five limitations to AI that must be overcome.

Artificial intelligence is attracting growing amounts of corporate investment, and as the technologies develop, the potential value that can be unlocked is likely to grow. So far, however, only about 20 percent of AI-aware companies are currently using one or more of its technologies in a core business process or at scale.

For all their promise, AI technologies have plenty of limitations that will need to be overcome. They include the onerous data requirements listed above, but also five other limitations:

First is the challenge of labeling training data, which often must be done manually and is necessary for supervised learning. Promising new techniques are emerging to address this challenge, such as reinforcement learning and in-stream supervision, in which data can be labeled in the course of natural usage.Second is the difficulty of obtaining data sets that are sufficiently large and comprehensive to be used for training; for many business use cases, creating or obtaining such massive data sets can be difficult—for example, limited clinical-trial data to predict healthcare treatment outcomes more accurately.Third is the difficulty of explaining in human terms results from large and complex models: why was a certain decision reached? Product certifications in healthcare and in the automotive and aerospace industries, for example, can be an obstacle; among other constraints, regulators often want rules and choice criteria to be clearly explainable.Fourth is the generalizability of learning: AI models continue to have difficulties in carrying their experiences from one set of circumstances to another. That means companies must commit resources to train new models even for use cases that are similar to previous ones. Transfer learning—in which an AI model is trained to accomplish a certain task and then quickly applies that learning to a similar but distinct activity—is one promising response to this challenge.The fifth limitation concerns the risk of bias in data and algorithms. This issue touches on concerns that are more social in nature and which could require broader steps to resolve, such as understanding how the processes used to collect training data can influence the behavior of models they are used to train. For example, unintended biases can be introduced when training data is not representative of the larger population to which an AI model is applied. Thus, facial recognition models trained on a population of faces corresponding to the demographics of AI developers could struggle when applied to populations with more diverse characteristics. A recent report on the malicious use of AI highlights a range of security threats, from sophisticated automation of hacking to hyper-personalized political disinformation campaigns.

Organizational challenges around technology, processes, and people can slow or impede AI adoption

Organizations planning to adopt significant deep learning efforts will need to consider a spectrum of options about how to do so. The range of options includes building a complete in-house AI capability, outsourcing these capabilities, or leveraging AI-as-a-service offerings.

Based on the use cases they plan to build, companies will need to create a data plan that produces results and predictions, which can be fed either into designed interfaces for humans to act on or into transaction systems. Key data engineering challenges include data creation or acquisition, defining data ontology, and building appropriate data “pipes.” Given the significant computational requirements of deep learning, some organizations will maintain their own data centers, because of regulations or security concerns, but the capital expenditures could be considerable, particularly when using specialized hardware. Cloud vendors offer another option.

Process can also become an impediment to successful adoption unless organizations are digitally mature. On the technical side, organizations will have to develop robust data maintenance and governance processes, and implement modern software disciplines such as Agile and DevOps. Even more challenging, in terms of scale, is overcoming the “last mile” problem of making sure the superior insights provided by AI are instantiated in the behavior of the people and processes of an enterprise.

On the people front, much of the construction and optimization of deep neural networks remains something of an art requiring real experts to deliver step-change performance increases. Demand for these skills far outstrips supply at present; according to some estimates, fewer than 10,000 people have the skills necessary to tackle serious AI problems. and competition for them is fierce among the tech giants.

AI can seem an elusive business case

Where AI techniques and data are available and the value is clearly proven, organizations can already pursue the opportunity. In some areas, the techniques today may be mature and the data available, but the cost and complexity of deploying AI may simply not be worthwhile, given the value that could be generated. For example, an airline could use facial recognition and other biometric scanning technology to streamline aircraft boarding, but the value of doing so may not justify the cost and issues around privacy and personal identification.

Similarly, we can see potential cases where the data and the techniques are maturing, but the value is not yet clear. The most unpredictable scenario is where either the data (both the types and volume) or the techniques are simply too new and untested to know how much value they could unlock. For example, in healthcare, if AI were able to build on the superhuman precision we are already starting to see with X-ray analysis and broaden that to more accurate diagnoses and even automated medical procedures, the economic value could be very significant. At the same time, the complexities and costs of arriving at this frontier are also daunting. Among other issues, it would require flawless technical execution and resolving issues of malpractice insurance and other legal concerns.

Societal concerns and regulations can also constrain AI use. Regulatory constraints are especially prevalent in use cases related to personally identifiable information. This is particularly relevant at a time of growing public debate about the use and commercialization of individual data on some online platforms. Use and storage of personal information is especially sensitive in sectors such as banking, health care, and pharmaceutical and medical products, as well as in the public and social sector. In addition to addressing these issues, businesses and other users of data for AI will need to continue to evolve business models related to data use in order to address societies’ concerns.. Furthermore, regulatory requirements and restrictions can differ from country to country, as well from sector to sector.

Implications for stakeholders

As we have seen, it is a company’s ability to execute against AI models that creates value, rather than the models themselves. In this final section, we sketch out some of the high-level implications of our study of AI use cases for providers of AI technology, appliers of AI technology, and policy makers, who set the context for both.

For AI technology provider companies: Many companies that develop or provide AI to others have considerable strength in the technology itself and the data scientists needed to make it work, but they can lack a deep understanding of end markets. Understanding the value potential of AI across sectors and functions can help shape the portfolios of these AI technology companies. That said, they shouldn’t necessarily only prioritize the areas of highest potential value. Instead, they can combine that data with complementary analyses of the competitor landscape, of their own existing strengths, sector or function knowledge, and customer relationships, to shape their investment portfolios. On the technical side, the mapping of problem types and techniques to sectors and functions of potential value can guide a company with specific areas of expertise on where to focus.Many companies seeking to adopt AI in their operations have started machine learning and AI experiments across their business. Before launching more pilots or testing solutions, it is useful to step back and take a holistic approach to the issue, moving to create a prioritized portfolio of initiatives across the enterprise, including AI and the wider analytic and digital techniques available. For a business leader to create an appropriate portfolio, it is important to develop an understanding about which use cases and domains have the potential to drive the most value for a company, as well as which AI and other analytical techniques will need to be deployed to capture that value. This portfolio ought to be informed not only by where the theoretical value can be captured, but by the question of how the techniques can be deployed at scale across the enterprise. The question of how analytical techniques are scaling is driven less by the techniques themselves and more by a company’s skills, capabilities, and data. Companies will need to consider efforts on the “first mile,” that is, how to acquire and organize data and efforts, as well as on the “last mile,” or how to integrate the output of AI models into work flows ranging from clinical trial managers and sales force managers to procurement officers. Previous MGI research suggests that AI leaders invest heavily in these first- and last-mile efforts.Policy makers will need to strike a balance between supporting the development of AI technologies and managing any risks from bad actors. They have an interest in supporting broad adoption, since AI can lead to higher labor productivity, economic growth, and societal prosperity. Their tools include public investments in research and development as well as support for a variety of training programs, which can help nurture AI talent. On the issue of data, governments can spur the development of training data directly through open data initiatives. Opening up public-sector data can spur private-sector innovation. Setting common data standards can also help. AI is also raising new questions for policy makers to grapple with for which historical tools and frameworks may not be adequate. Therefore, some policy innovations will likely be needed to cope with these rapidly evolving technologies. But given the scale of the beneficial impact on business the economy and society, the goal should not be to constrain the adoption and application of AI, but rather to encourage its beneficial and safe use.

Stay current on your favorite topics


About the author(s)

Michael Chui is a partner of the McKinsey Global Institute, where James Manyika is chairman and a director; Mehdi Miremadi is a partner in McKinsey’s Chicago office; Nicolaus Henke is a senior partner in the London office; Rita Chung is a consultant in the Silicon Valley office; Pieter Nel is a specialist in the New York office, where Sankalp Malhotra is a consultant.


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Visualizing the uses and potential impact of AI and other analytics

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How artificial intelligence and data add value to businesses


An executive’s guide to AI


Mexico airport plans raise serious concerns


Thursday, May 30, 2019

Solutions are needed for Mexico City’s airport overcrowding, but the president’s plans are highly questionable

Source: Mexico City International Airport; IATA; media reports; Oxford Analytica


Mexico City’s new international airport (NAICM) was contentious due to concerns about costs and environmental impacts, but by scrapping it mid-construction, President Andres Manuel Lopez Obrador (AMLO) has generated more controversy.

Investors mistrust AMLO, while aviation experts are concerned about his three-airport alternative. Challenges include the city’s high altitude, which necessitates long runways, and its topography, with mountains forcing complex flight patterns.

An ill-considered hill has already increased costs at Santa Lucia. Having pushed so hard to scrap the NAICM, AMLO faces all of the blame for problems that may arise with his alternative proposals; further overspends and overruns look likely.


Splitting air traffic across three airports could hinder Aeromexico, which benefits from having a single, major hub in the capital.Any failure to expand travel infrastructure and efficiency could weigh on central Mexico’s economic prospects.Fears that AMLO may launch more plebiscites such as that which led to the scrapping of the NAICM will hit investor faith in future projects.Major projects such as the three-airport plan will be a real test of AMLO’s ability to deliver on promises to prevent corruption.

May 29, 2019

Sonia Hates Hindus, says Former President Pranab Mukherjee

*Pranab Mukherjee has disclosed how under the leadership of Sonia Gandhi, Hindus have been implicated in the target. Within a few months of coming to power in November 2004, Shankaracharya Jayendra Saraswati was arrested in a false case of murder on the occasion of Diwali. At the time of his arrest, he was preparing for 2500 years of pilgrimage to Trikal. After the arrest, he was also shown abusive charges like porn CD and tampering. However, this allegation has never been proved*.

*Pranab Mukherjee has mentioned this incident in his book ‘The Coalition Years 1996-2012’. He wrote that “I was very angry with this arrest and in the Cabinet meeting I raised this issue too. I asked  the question, Is the scale of secularism in the country limited to Hindu saints only? Can a state police show the courage to arrest a Muslim cleric on the occasion of Eid?“.*

*The book by former President Pranab Mukherjee has raised a major question ahead of the country. The question is who was behind the arrest of the Shankaracharya Jayendra Saraswati of Kanchi Kamakoti Peetha and the unscrupulous accusations made against him? Till now, it has been widely believed that Jayalalitha had made the chief minister’s chair at the behest of Shashikala at the time when the plot of Kanchi Peetha’s Shankaracharya was found in a false case and arrested. At that time, after all this incident, there was a dispute about a land deal, but now it is clear after Mukherjee’s disclosure that the arrest was done not only on Jayalalitha’s wish but also on Sonia Gandhi’s gesture. Actually, that was the time when there prevailed close relations between Sonia and Jayalalitha.*

*Between 2004 and 2014, Sonia Gandhi was handling the top power for ten years, since then she had started crushing the religious-cultural beliefs of the Hindus. Shankaracharya’s arrest was done only to humiliate the great saint of India’s Hindu society. It is clear that the task of mocking the media by arresting such a great saint of Hinduism was a part of the Christian conspiracy.*

*Apart from this, it has also been believed that it was Vatican’s conspiracy to arrest him so that they can have an easy task of spreading Christianity in south India.*

*At the time when the entire Hindu society could be in the target of massive conversion from Meenakshipuram, the Kanchi Math built a temple and sent a message to the Dalit community and said that if the devotees cannot reach the temple then the temple will reach them.*

*The amount of efforts Kanchi math has put towards building social equality, no other Hindu institution has done it.*

*This was the reason that it was knocking down the illegal attempts of Christian missionaries*. *He was arrested from
Andhra Pradesh, where the Congress government was ruling. After the arrest, he was kept in the Vellore jail in Tamil Nadu, also he was tortured there

May 28, 2019



20:44 | 08/01/16


HOW MANY potential Jews are in the photo?. (photo credit:" REUTERS)

Judaism can be a light unto the nations. Why not give more people an opportunity to not only bask in that light but to join us in projecting it to the world?

No matter how you look at the demographic studies, one thing is clear: the number of Jews is not increasing. We continue to lose Jews and potential Jews every day through intermarriage, assimilation and alienation. Birthrates are also being influenced by economic forces; as the population becomes more affluent Jews have fewer children. Even the Orthodox, who are largely seen as the sole engine for population growth, are feeling constrained by the rising cost of a Jewish education.

Tuition costs are serving as a natural contraceptive in our community.

These trends cannot continue if the Jewish people are to survive and thrive.

Today, the world’s 15 million Jews are an infinitesimal percentage of the global population of more than 3 billion. If Judaism is to survive, we must, at a minimum, double our numbers, and the only way to do that is to have more children and reverse our policy of not welcoming and seeking Halachic (Jewish law) converts to Judaism.

Though it is commonly associated with Christianity, Jews did engage in proselytizing. Sue Fishkoff noted in Try it You’ll like it! Should Jews Proselytize? that “Judaism has a long history of not only welcoming, but encouraging gentiles to become Jewish. From the day Abraham picked up a flint and performed his own circumcision, thus becoming Judaism’s first convert, ancient Israelites openly spread their teachings among the nations they encountered.”

Fishkoff says Jewish proselytizing was so successful, it’s estimated that by the first century C.E. fully 10 percent of the Roman Empire was Jewish, close to eight million people. Jews stopped proselytizing, she said, “because of pressure from Christian and then Muslim rulers, beginning in 407 C.E. when the Roman Empire outlawed conversion to Judaism under penalty of death.”

Unlike this earlier time, I am not talking about proselytizing to people who are devoted to a particular faith. We Jews do not believe that non-Jews who are in a relationship with God are upgrading their existence by becoming Jewish. But there are countless millions of people who live outside a faith framework. They want a spiritual life and I see no reason not to offer them Judaism.

Of course, my main target audience are people who are born Jews but don’t know it or do not identify as Jews. We must educate them in their faith. But I believe Judaism also has a great deal to offer people with no religion, those who find that religion does not speak to them.

The three great personal challenges of our time are these: an inability to stay married or sustain a loving, passionate and intimate relationship; an inability to raise inspired children; and inability to be happy.

Judaism is uniquely attuned to catering to these needs because our faith is focused on the richness of everyday life, unlike other religions that seek empires or worry more about the world to come than the one we live in today. Unlike every other religion in the world, we Jews don’t claim a copyright on truth. We don’t believe that by becoming a Jew you come closer to God than you would as a Christian or Muslim. We respect the Godly qualities of other faiths that lead to a righteous life. But we also believe that Jewish light can illuminate the earth.

Part of that entails spreading the light of Jewish values.

But part of it also entails having more Jewish converts.

We also need a critical mass of people who love and support Israel. The current Jewish population is simply too small. How can Diaspora Jewry pressure and influence their respective governments to support the Jewish state when the Jewish population in most countries outside the US is paltry? Will governments choose to side with 14 million Jews over half a billion Arabs? In the United States, we have for too long relied on the super-patriotism of Jews and their disproportional involvement in electoral politics. Here, too, however, the numbers are shrinking as a percentage of the American population. As the percentage of other minorities increases, the proportion of Jews decline. Today, Jews are barely 2% of the population; how long can we count on elected officials to take our concerns into consideration? How will we convince future elected bodies comprised of Hispanics and Asians and other ethnic groups that have no history of engagement with the Jewish community or Israel? As we watch terrorism spreading in Europe and contemplate what that continent will look like as Christianity continues to subside, the answer just might be teaching Judaism to non-Jews.

It is often said that it is hard to be a Jew, and it is true that being a Jew comes with certain obligations to oneself, to our fellow human and to the one God. Jews also carry the heavy burden of history and, even today, remain targets of individual anti-Semites, religious zealots and countries such as Iran that seek our destruction.

Still, during this period of violence, unhappiness and political division, the world needs the Jewish ideals of peace and harmony.

I believe that it is time for Jews to reach out and share the beauty, the morality and the spirituality of Judaism with those who are seeking answers to the difficult questions of modern life and want to find secrets for staying married, inspiring our children and finding contentment and happiness. For those seeking to become Jewish, it is critical that converts go through an Orthodox conversion with a respected Orthodox Beth Din.

Central to an Orthodox conversion is the requirement to observe Shabbat and Jewish holidays and refrain from their desecration. What better antidote is there than Shabbat to today’s high-stress, workaholic workweek than a day of rest for contemplation and time to devote to the family? My colleague Mitchell Bard suggested that Shabbat is a way to turn high-strung east-coasters who spend all weekend talking about what they do during the week into laid-back Californians who spend all week talking about what they did during the weekend.

Also vital is kosher food consumption and a kosher home as well as observing the laws of family purity, which heighten erotic desire and inject an element of erotic sinfulness into a relationship.

Judaism can be a light unto the nations. Why not give more people an opportunity to not only bask in that light but to join us in projecting it to the world? As the future of the Jewish people continues to grow more precarious, it is a moral imperative that we do everything we can to strengthen our community spiritually, politically and demographically. The time to spread the virtues of Judaism is now.

The author, “America’s rabbi,” whom The Washington Post calls “the most famous rabbi in America,” is executive director of The World Values Network, which promotes universal values in politics and culture, and is the international best-selling author of 30 books, including his forthcoming The Israel Warriors Handbook. Follow him on Twitter @RabbiShmuley.