Knowledge Nugget: Economic Survey flags India’s ‘Power Gap’. What is it?

The Australia-based Lowy Institute’s Power Gap Index suggests that India is operating below its full strategic potential. India’s power gap score is -4.0, the lowest in Asia, excluding Russia and North Korea. : Economic Survey 2025-26

Key Takeaways:

1. The Power Gap Index is a secondary analysis derived from the Asia Power Index, which is an annual index produced by the Australia-based Lowy Institute.

2. The Asia Power Index consists of eight measures of power, 30 thematic sub-measures and 131 indicators. The Index scores 27 countries’ comprehensive power using a weighted average across eight thematic measures.

3. The eight measures of power, consists of four resource measures, which look at what countries have, and four influence measures, which look at what countries do with what they have.

4. Resource-based measures 

(i) Economic capability: Conventional military strength; measured in terms of defence spending, armed forces and organisation, weapons and platforms, signature capabilities and Asian military posture.

(ii) Military capability: Conventional military strength; measured in terms of defence spending, armed forces and organisation, weapons and platforms, signature capabilities and Asian military posture.

(iii) Resilience: The capacity to deter real or potential external threats to state stability; measured in terms of internal institutional stability, resource security, geoeconomic security, geopolitical security and nuclear deterrence.

(iv) Future resources: The projected distribution of future resources and capabilities, which play into perceptions of power today; measured in terms of estimated economic, defence and broad resources in 2035, as well as working-age population forecasts for 2050.

5. Influence-based measures

(i) Economic relationships: The capacity to exercise influence and leverage through economic interdependencies; measured in terms of trade relations, investment ties and economic diplomacy.

(ii) Defence networks: Defence partnerships that act as force multipliers of autonomous military capability; measured through assessments of alliances, regional defence diplomacy and arms transfers.

(iii) Diplomatic influence: The extent and standing of a state’s or territory’s foreign relations; measured in terms of diplomatic networks, involvement in multilateral institutions and clubs, and overall foreign policy and strategic ambition.

(iv) Cultural influence: The ability to shape international public opinion through cultural appeal and interaction; measured in terms of cultural projection, information flows and people exchanges.

6. For the purposes of Index, power is defined as the capacity of a state to direct or influence the behaviour of other states, non-state actors, and the course of international events. In short, the Index seeks to measure the ability of countries to shape and respond to their external environment.

7. The Power Gap provides a secondary analysis to the Asia Power Index based on the interplay between resources and influence. Countries can be overperformers or underperformers, irrespective of where they place in the rankings.

8. Countries with outsized influence in Asia relative to their resources have a positive Power Gap. Conversely, countries that exert undersized influence relative to their resources register a negative Power Gap.

Highlights of Power Gap Index

1. The Index suggests that India is operating below its full strategic potential. India’s power gap score is -4.0, the lowest in Asia, excluding Russia and North Korea.

2. Japan’s Power Gap score of 11.3 reveals it to be a quintessential “smart power”, making efficient use of limited resources to wield broad-based diplomatic, economic, and cultural influence in the region.

Top 5 countries in the Power Gap Index. (Source: power.lowyinstitute.org)

3. North Korea derives its power principally from its military resources and nuclear weapons capability. The country’s diplomatic and economic isolation, however, limits its regional influence resulting in a Power Gap score of –8.2.

Countries having lower rankings in the Power Gap Index. (Source: power.lowyinstitute.org)

4. Developing countries often register influence shortfalls — reflecting their unrealised power potential and internal constraints on their ability to project power abroad.

BEYOND THE NUGGET: Global Soft Power Index 2026

1. Ongoing economic uncertainty and geopolitical tensions have led to declining public trust and increased scrutiny of countries’ behaviour, resulting in weaker national brand perceptions and lower scores in the Brand Finance Global Soft Power Index 2026 — ranking 193 UN member states across 55 metrics — published.

2. The report defines soft power as “a nation’s ability to shape preferences and behaviours in the international arena through attraction and persuasion rather than coercion.”

3. The United States retained the top position with a score of 74.9 out of 100, despite being the only country to witness the sharpest decline, by 4.6 points, compared to last year, the report highlights.

4. China ranks second, being the only country in the index to record an increase in its soft power score this year — up 0.7 points to 73.5 —narrowing the gap with the United States to less than 1.5 points and ranking higher on 19 out of the 35 nation brand attributes.

5. India ranks 32nd with a score of 48.0, slipping two positions and declining 1.8 points from last year.

Post Read Question

Consider the following statements with reference to the Power Gap Index:

1. It is derived from the Asia Power Index published annually by the Lowy Institute.

2. It only measures a country’s military power in comparison to others in Asia.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

(Sources: Economic Survey flags drying up of FDI/FII flow, Re stability,  Top 10 countries on Global Soft Power Index 2026)

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