Over the past decade, India has swiftly moved from the periphery toward the center of US foreign policy in Asia. Policymakers on both sides of the aisle in Washington see the potential for a democratic and pluralistic India to act as an engine of global growth, an alternative role model to authoritarian China, a guarantor of stability in Asia, and a bulwark against the threat of radical Islam emanating from Afghanistan, Pakistan, and the greater Middle East. With its British legal and parliamentary traditions, English-speaking elites, and increasingly globalized firms, India is arguably the Asian nation best positioned to partner...

Over the past two years, India’s economic prospects have begun to come into question. It can no longer call itself the world’s fastest-growing democracy or the second-fastest-growing major economy after China.¹⁵⁹ Those titles, fleetingly held by India earlier this decade, have since passed to Ghana and Indonesia, respectively.

India’s annual GDP growth has plummeted from 9.3 percent in 2010 to an estimated 4 percent in 2013 (figure 2). Moreover, compared to successful East Asian economies, India’s slowdown has occurred at a low level of per capita income ($3,340 in purchasing power parity terms). At a similar level of development, China,...