Multinationals Pivot To India, Has The Indian Economy Hit A Purple Patch?

The Indian growth story has now hit warp speed and is showing zero indications of slowing down.

Apple Inc CEO Tim Cook launched the first set of Apple retail stores in the Indian cities of Mumbai and New Delhi as the world’s top tech brand set out to further establish its presence in the thriving and rapidly expanding Indian market.

These are Apple’s first retail locations in almost five years, since it opened its last full-fledged outlet in the Chinese capital, Beijing, in 2018. Apple’s growing fascination with the Indian market is driven by both India’s massive business potential and the growing economic capacity of its people.

Today’s India’s economic strength and resilience can be attributed to her timely and corrective macroeconomic measures, prudent policy interventions, and her determined efforts at developing a conducive atmosphere for businesses.

It is the result of these endeavours that India has been hailed as a bright spot by renowned organizations and individuals across the world. The International Monetary Fund, in its recent outlook, predicted an annual growth rate of 5.9 per cent for India while keeping the global growth estimates at just 2.9 per cent. The IMF has predicted a high-flying Indian performance in an otherwise discouraging outlook.

Daniel Leigh, the chief of IMF’s World Economic Studies Division at the spring meetings of 2023 at Washington said, “We have a growth rate for India which is 6.8 per cent in 2022. Let’s not forget that this is one of the bright spots in the global economy right now. Such a high growth rate and it is moderating down to 5.9 with a minus point to revision compared to general.”

In a law-abiding atmosphere with transparency as a major component, almost every sector of the Indian economy is performing above par.

India’s Purchasing Manager’s Index, or PMI, an indicative marker of a country’s economic performance in the manufacturing and service sectors, has risen to a three-month high.

In March, India’s manufacturing PMI was at 56.4, which was much better than even the favourable market forecast of 55. Output rose the fastest since December. (Source: S&P Global)

India has set the target of augmenting its manufacturing market to one trillion dollars USD in a few years. Experts are extremely optimistic regarding India’s manufacturing sector and predict that manufacturing will be the country’s growth engine in the fourth industrial revolution.

An expert on the Indian Economy, Brinda Jagirdar, elaborated on India becoming a manufacturing hub in an interview given to ANI said, “Now with the new policy of China Plus 1, India has become an attractive destination for manufacturing investment. Of course, we have been competing with countries like Vietnam and Bangladesh and other Middle Eastern countries but right now the effort is to provide an attractive environment for manufacturing and I think we and I think we are on the track to do that.”

India’s thriving information technology sector, her commitment to transitioning to non-fossil fuel energy with an increasing number of entities shifting their operations to renewable sources, and her futuristic policies regarding artificial intelligence are not just helping her own growth but are also fostering global efforts towards achieving better living standards for people world over.

Global offshoring and digitalization have also given India an edge over its market competitors.

India, especially under Prime Minister Narendra Modi’s government, has focused on revising India’s labour laws. The Reformatory Labour Codes of 2020, which ensured multi-layered security for the Indian workforce, have added to the country’s growth.

Jagirdar also mentioned, “Now, the effort is to bring everything into the formal sector. So, through digital, through infrastructure, through whatever way the work is being done in the economy is to be brought in the formal sector.”

India’s talented working-age population is her biggest resource. India has prioritized upskilling around 400 million people to translate this talent into tangible growth for the country as a whole.

Apart from the availability of highly skilled human resources at reasonable wages, an important factor responsible for drawing more investors to India is the Modi government’s revolutionary reforms towards safeguarding investors’ interests.

India has improved by a remarkable 79 positions from 142 in 2014 to 63 in 2022 in terms of ease of doing business.

Policies that encourage investment rather than exploit it, have fared extremely well for the Indian market, as both domestic and foreign investors are confident about putting their money in the Indian market.

Andrea Diasparro, the executive vice president of the Danieli group said, “Nowadays we see huge potential in the Indian market. India is really a very fast-growing country, full of opportunities. So, I would say that the country’s need, the infrastructure needs, let’s say innovation, most of these you are able to do on your own with very good companies and very good entities coming up every day in the Indian market.”

India has also emerged as one of the major economies that has adopted and is working on technological innovation.

The country is working overtime to make up for what was deemed a missing piece in the country’s economic model–a robust infrastructure. From expressways to dedicated freight corridors to new ports, India’s infrastructure improvement plan is textbook.

India has already increased the capital outlay for infrastructure by 33 per cent in the ongoing fiscal year.

Observers say the cumulative efforts towards further strengthening the Indian economy will pay off in times to come. India, which is close to having a USD 3.5 trillion economy, is projected to double that number in the next nine years.

At a time when a precarious geopolitical climate coupled with an intensifying fuel war, disrupted supply chains, and looming inflation is taking a crippling toll on global growth, the country has stood out as a single ‘bright spot’.

Source ANI