Your whole argument is that low IQ leads to an undeveloped country rather than impoverishment leads to lower IQ. I don't think it is entirely one way.
IQ is also only one (mediocre) signal you are putting a lot of emphasis on. India does not score well, yet it is clearly emerging and has very successful individuals from mathematics to chess.
Someone mentioned malaria-afflicted test takers before. Of course better healthcare leads to lower disease load, which leads to higher IQ, but it’s only a weak link, simply not leaving old tires with water strewn about the place is free.
IQ is also only one (mediocre) signal you are putting a lot of emphasis on. India does not score well, yet it is clearly emerging and has very successful individuals from mathematics to chess.