The World Economic Forum in Davos this year heralded the rise of an economic giant that is inhabiting the global economic space: India. Business and political leaders gathered in the Swiss town of Davos in the backdrop of inflation, high interest rates that central banks have pushed, and the looming threat of recession. India showed up at Davos with one priority on its agenda, to prove itself to the world and to prove their potential to become a $10 trillion economy by 2035.
At the forum, Indian policy makers and giants of the private sector emphasized ‘the India opportunity’ in the world today, marketing India as the world’s next big investment opportunity. During the COVID-19 pandemic, India prioritized the resilience of their economy above its efficiency; and this is what helped it rise above the crisis. Primarily, tech companies in India like TATA, became tenacious, stubbornly unyielding to become susceptible to the crisis, and this tech tenacity met an audacious Indian administration that was prepared to delve into resilience programs throughout 2020 and 2022. The approach of the Indian government has been the creation of a road to a $10 trillion economy, to ensure that India’s economy is resilient and that there is a consistent 6-8% growth rate for the next 10 years or so.
From the perspective of the private sector, Mr Natarajan Chandrasekaran, chairman of the TATA group, joined the panel for India in Davos and affirmed that the growth of industry had been ‘fantastic’. Chandrasekaran also pledged that there was heavy commitment from the business community to government plans for growth.
In a discussion of the future of the Indian economy, the Indian panel (consisting of Chandrasekaran and Ashwini Vaishnaw, the incumbent Ministers of Railways, Communications, and Electronics & Information Technology) concluded that there are 3 major global trends in the world today for every country developed or developing. First, the digital transition or AI transition, second, the energy transition, and third, the supply chain and geopolitical transitions. India is uniquely positioned in all three areas. In the first area, India has a fantastic tech sector with a massive talent pool. Then, energy transition will fit the ‘India opportunity’ because it is the only country of scale where 2/3rds of growth for the next 25 years is secure and so the energy per-capita is the lowest in the world and new energy is created for development projects.
Plans to reach net-zero emissions by 2070, and for renewable energy to account for 50% of India’s energy mix by 2030, have also unleashed a wave of green investment. Particularly regarding supply chains, the war in Ukraine has caused massive disruptions but India’s approach is the ‘India plus policy’ which Chandrasekaran elaborates on. The India plus policy, hopes to push India to the helm of the supply chain crisis and instead of waiting on other nations to repair the distraught supply chain, India takes the initiative to work with the rest of the world to re-build one. Consumption is also a critical aspect of gaining investor confidence; the availability of a workforce and consumer markets. Ila Patnaik, the Chief Economist at the Aditya Birla Group and former economic advisor to the government of India, noted that India has a working-age population of more than 900 million people that could hit more than 1 billion over the next decade. Many of these workers are entrepreneurial, English-speaking and digitally literate- an asset to the Indian economy.
The Indian economy has emerged tenacious and is expected to have the best performance among all major economies. The World Bank is estimating growth of 6.6%, compared to just 0.5% for the United States and 4.3% for China. India’s economy currently stands at nearly $3.5 trillion, making it the world’s fifth largest. Recently, America has also expressed its interest in deepening economic ties with India, and Apple (America’s largest publicly traded company) has already shifted most of its production to India.
( source: News first)