Power Gap Index

Source:  BS

Subject:  Miscellaneous

Context: The Economic Survey 2025-26, tabled in Parliament has cited the Power Gap Index for the first time.

• The Survey highlights a critical Strategic Paradox: while India has officially entered the Major Power category, it still registers a negative Power Gap score of -4.0, indicating that the nation is operating below its full strategic potential.

About Power Gap Index:

What is it?

• The Power Gap Index is a secondary analytical measure derived from the Asia Power Index. It measures a country’s Power Efficiency—the ability to convert raw resources (wealth and military) into actual regional influence (diplomacy and networks).
• Positive Score: An Overperformer or Smart Power.
• Negative Score: An Underperformer or a state with Unrealized Potential.

Developed By:

• Organization: The Lowy Institute, an independent international policy think tank based in Sydney, Australia.
• Launch: Part of the annual Asia Power Index project (established in 2018).

Aim & Objectives:

• To show that having a large economy or military doesn’t automatically equate to geopolitical influence.
• To help nations identify where their conversion of power is failing—whether in diplomacy, trade relationships, or defense networks.

Criteria an Methodology:

• The Power Gap is calculated by comparing a country’s Comprehensive Power score against its Expected Power based on its resource base.
• It uses 131 indicators across eight thematic measures:

1. Resource-Based Measures (What a country HAS)
   • Economic Capability: GDP, technology, and global connectivity.
   • Military Capability: Spending, armed forces, and signature weapons.
   • Resilience: Internal stability, energy security, and nuclear deterrence.
   • Future Resources: Demographic dividends and economic projections for 2035.
2. Influence-Based Measures (What a country DOES)
   • Economic Relationships: Trade ties and investment leverage.
   • Defence Networks: Alliances, regional diplomacy, and arms transfers.
   • Diplomatic Influence: Global standing and foreign policy ambition.
   • Cultural Influence: Ability to shape international opinion.

India’s Ranking & The 2025-26 Scorecard:

• Top 3 ranker in Asia Power Index: USA (Rank 1^st), China (Rank 2^nd), and India (Rank 3^rd).
• In the Asia Power Index 2025, India achieved a historic milestone but remains a strategic outlier:

Strategic Significance for India:

According to the Economic Survey 2026, the negative gap is a Policy Call to Action.

1. India needs to move from being a recipient of stability to a source of stability for the region.
2. The survey suggests that India’s transition to a developed nation (Viksit Bharat) depends on embedding domestic capabilities into global production systems.
3. Despite being the 3rd most powerful nation, India ranks lower in Defense Networks (11th) and Economic Relationships (9th), indicating areas for urgent diplomatic focus.