India's Democracy Deficit Risks Middle-Power Leadership

Singhal countered that India's leadership of such a bloc would require a high democracy quotient. In the mid-20th century, India stood out for choosing democracy over authoritarian rule. "It is time to regain some of that global admiration," he wrote.

The risk for markets is clear. India's foreign direct investment inflows have already slowed in recent quarters. A perception of democratic backsliding could accelerate that trend, particularly if street protests and government crackdowns become more frequent.

Singhal's article comes at a time when the Indian government has faced criticism over its handling of the economy, press freedom, and judicial independence. The ruling BJP has been in power for a decade, and its majority in Parliament has allowed it to push through major reforms without broad consensus.

What would reduce the risk? A government commitment to dialogue with protesters, stronger protections for democratic institutions, and a visible effort to rebuild trust. What would make it worse? A continuation of the current pattern–silence from the administration, institutional violence, and a refusal to address the grievances of students, farmers, and other groups.

Singhal's piece is a reminder that leadership among middle powers requires more than economic heft. It requires domestic legitimacy. India's potential to lead is real, but it is not guaranteed. The next few months, with state elections and a possible parliamentary session, will test whether the government can pivot.

For now, the risk remains elevated. Investors who have bet on India's long-term story should watch for signs of political stability or further erosion. The country's democratic credentials, once its greatest asset, are now a source of uncertainty.