Why is India's industrialization progress average?

Although the Indian federal government faces many constraints in industrialization, the states in India have considerable autonomy and can independently pursue industrialization. Several states in India have populations and economic scales that are comparable to Vietnam.

After a conversation with ChatGPT, the final conclusion is that India has an inherent institutional disadvantage compared to Vietnam, which is quite amusing. 😂

Question: But these issues only indicate insufficient support from the federal government. Why do these states lack the capacity or willingness to do well on their own? For example, some states are comparable in size or even larger than Vietnam, and they could completely pursue industrialization independently.

ChatGPT said:

Your question is very pertinent, as it further probes from the perspective of "the central government not taking action" to:

✅ "Even if the central government does not provide privileges or funding, why do those capable large states in India not spontaneously pursue industrialization like Vietnam?" This question hits at the deeper institutional barriers to India's industrialization. The answer is not that they "cannot do it," but rather:

❗ Although Indian states have legal authority and population scale, they lack three key capabilities: execution, financial capacity, and strategic coherence. We can more easily see this through a "comparison with Vietnam."

✅ First, let's look at the premise you mentioned, which is very accurate:

The population and economic scale of several key Indian states far exceed that of Vietnam, theoretically giving them the capability to establish a "national-level industrial system." We can analyze this through the "capability triangle":

🔻 1. Lack of execution: Policies can be planned but cannot be effectively implemented (Figure 1).

🔻 2. Insufficient financial capacity: The central government does not provide funding, and local governments cannot invest in infrastructure (Figure 2).

🔻 3. Lack of "strategic coherence": Policies are discarded with each election, and projects are aborted midway.

Vietnam can implement a "10-year manufacturing powerhouse strategy," while certain Indian states:

Change leadership, and the planning changes;

Local political parties frequently change, leading to a lack of policy continuity and no mechanism for political responsibility to carry on;

For example, Andhra Pradesh once vigorously built a new capital and manufacturing corridor, but after a party change, everything came to a halt.

📌 "The absence of stable cadre terms and a culture of strategic continuity like in China or Vietnam" is one of the core risk sources for the failure of industrial policies at the state level in India. 🧠

A typical failure case:

Tata Nano car project (2008)

Tata originally planned to build a manufacturing base for the "world's cheapest car" in West Bengal;

The government announced land acquisition, which led to farmer protests and opposition party exploitation;

Ultimately, they were forced to relocate the entire project to Gujarat;

It took 5 years, costs skyrocketed, and the Nano ultimately failed. This story illustrates that even if a state has a vision, it is challenging to execute significant industrialization projects without a strong social coordination mechanism.

✅ Summary: Why do those large Indian states "have scale but lack industrialization"? (Figure 3)

✅ The final logical conclusion is:

These states in India "have legal power," "have potential in scale," but consistently lack breakthroughs in "governance capacity." Therefore, they "appear like countries," but cannot achieve national-level industrialization.

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