Aggressive investment in defence R&D and futuristic technologies is critical

Cdr S. Shrikumar (retd)

History provides several cautionary instances of nations that stood within an arm’s reach of a transformative opportunity—only to lose the moment and slide into relative decline. One modern example is Argentina of the early 1900s. In around 1913, Argentina ranked among the world’s 10 richest countries by per capita income, rivalling and surpassing many European nations. 

Argentina’s fertile Pampas generated enormous agricultural wealth that supported rapid urbanisation, triggered significant European immigration, and financed infrastructure development on a nation-wide scale. Contemporary observers predicted that Argentina would ride the wave of the second industrial revolution to achieve robust economic growth through diversification from commodities into steel, automobiles, and advanced manufacturing.

However, Argentina fell prey to the tragedy of missed opportunities. From the Thirties onward, successive governments went down the path of aggressive protectionism, import-substitution, nationalisation, and populist redistribution, prioritising short-term political gains over long-term, innovation-driven development.

Political instability, hyperinflation, debt defaults, and institutional decay eroded investor confidence and killed the people’s entrepreneurial spirit. Education and industrial R&D stagnated while brain drain emptied out Argentina’s human capital. What began as a promising march to industrial modernity ended as a wasted opportunity. Today, despite abundant resources and an educated population, Argentina remains stuck in the middle-income trap. 

Nations that seize transformative moments of history (Australia, Canada, South Korea) surge ahead and those that do not, are doomed to forever rue their missed destiny.

The Indian Parallel

The persistent lament, among India’s social commentators and economists, is that the reason India trails the developed world in industrial and manufacturing capability is its colonial past. The commentators believe, that in the 18th-19th century—at the time of the Industrial Revolution—India, then a British colony, was prevented from participating in the transformative technological and economic shifts of the Industrial Revolution.

This telling of India’s history, posits that British rule systematically deindustrialised India, destroying its thriving textile, steel, shipbuilding, and other sectors of the economy to fuel Britain’s own industrial ascent. This left India as an agrarian backwater, condemned to being a supplier of raw materials for industries in Britain.

Shashi Tharoor articulates this forcefully in his 2016 book, An Era of Darkness: The British Empire in India. Tharoor argues that Britain’s Industrial Revolution was premised on the deliberate deindustrialisation of India. He details how the East India Company and later the British Crown imposed tariffs and regulations that flooded India with cheap machine-made goods from Britain, while restricting Indian exports—destroying indigenous industries. In a widely cited remark from his book, Tharoor points out that when western critics blame India for having ‘missed the bus’ of the Industrial Revolution, his response is؅, ‘we missed the bus because you threw us under its wheels.’ 

Tharoor highlights that a massive transfer of wealth out of India—hundreds of millions of pounds annually—financed Britain’s factories, railways, and global dominance, while India slipped from a manufacturing powerhouse (contributing nearly 25 per cent of global industrial output in the 18th century) to a deindustrialised colony by the 19th century. 

Tharoor’s view echoes earlier Indian critiques. Economist and Indian nationalist Dadabhai Naoroji, in his seminal 1901 work Poverty and Un-British Rule in India, laid the foundation for this critique with his ‘drain of wealth’ theory. Naoroji calculated that Britain siphoned off roughly one-fourth of India’s annual tax revenue—tens of millions of pounds yearly. Naoroji linked this extraction directly to India’s impoverishment, famines, and industrial decline, arguing that the colonial system prevented capital accumulation and technological adoption essential for industrialisation.

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The counterfactual question, what might India have become had it remained indepen