- Eyes are turning again to India as a potential dynamo for businesses and investors the world over.
- It’s not the first time India has been tagged as the next big thing.
- Prime Minister Narendra Modi is aiming to make sure India can deliver on its promise this time around.
The Modi government is spending nearly 20% of its budget on capital investments, the most in at least a decade.
There’s a demographic dividend waiting to be cashed in too: India may have already surpassed China as the world’s most-populous nation with that young and growing workforce set to fill factories and boost productivity if education and infrastructure investment can keep up.
US-China rivalry is providing a tailwind. India and Vietnam will be the big beneficiaries as companies move toward a “China-plus-one” strategy, supply-chain analysts say. In a multipolar world, India’s embrace of a middle path has bolstered its image as a nation “with which everyone is interested in having a good relationship,” said Kenneth Juster, a former US ambassador to India.
The ambition is clear. In an August speech commemorating 75 years since India’s independence, Modi urged the nation to settle for nothing less than to “dominate the world.” “We must resolve to make India a developed nation in the next 25 years,” he said at the Red Fort in New Delhi. Bloomberg Economics expects the nation’s per capita income to pull even with some developed countries in that span, putting Modi’s goal within reach. Potential GDP growth will gradually peak at about 8.5% early next decade, propelled by corporate tax cuts, incentives for manufacturers and privatization of public assets.
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