A booming India; Towards the Emergence of an Economic Superpower

India might ultimately become world’s economic powerhouse in 2023 as it overtakes China economically. With a rapidly growing economy, a large workforce, and a shift to the West, India has all the necessary ingredients to become a major player on the world stage.

This optimistic argument begins with demographics. With a population that is significantly younger than that of the West and China, it is anticipated to overtake China as the most populated nation in the world this year. The median age in India is 27.6 against a global value of 30.3 years (World Economics, 2021). Furthermore, the middle class is steadily growing. These factors have contributed to a booming consumer market with rising demand for goods and services in sectors such as technology, finance, and healthcare.

Moreover, India’s poverty level is continually decreasing. According to the World Bank (2023), India will experience the strongest annual economic growth this year, averaging 6.9%, continuing a two-decade record of robust economic expansion. Last year, India surpassed the U.K. as the world’s fifth-largest economy and could even tie Germany for fourth place by 2025. Hence, the macroeconomic image is striking. Yet, maintaining this positive macroeconomic image calls for serious microeconomic reforms that strengthen the supply side of the economy. The nation’s infrastructure, which is still deficient in many places, especially in rural areas, is a significant obstacle. A major skills gap exists in India as well, with many employees missing the education and experience required for high-skilled positions in sectors like technology and healthcare.

India, though, has a will to make things better internally. Many new roadways have been constructed or are being designed in past few years. The length of rural roads has expanded and the number of airports has doubled since Prime Minister Narendra Modi took office in 2014. Also, blackouts have significantly decreased in frequency and electricity plant capacity has risen. According to the administration, the number of residences receiving piped water has skyrocketed over the last three years. 

Mr. Modi has also prioritized addressing India’s infamously costly and ineffective business environment by aiding the digitalisation efforts and adding new bankruptcy legislation. Meanwhile, India developed a vibrant start-up culture even before the Modi administration and is now home to start-ups with a market value of $1 billion. Due to the government’s determination to attract foreign direct investments, Indian emissaries have been the favourites of the Davos crowd.

As far as India’s position in the world stage is concerned, India seems to deepen the cooperation with the West especially through Quad summits. The Quad is extremely important for India since it may act as a form of containment towards China. More importantly New Delhi will lead the G-20 presidency by hosting the body’s summit and will also chair the Shanghai Cooperation Organisation. But given India’s charge of the G-20, India aims to validate its rising importance and establish its global leadership aspirations. India intends to lead a climate and development agenda that highlights its own environmental credentials and connects the needs of the Global South. Lastly, New Delhi wants to deliver on its pledge of $100 billion annually for developing countries to use for clean energy and climate change adaptation. Generally, India showcases a “multi-alignment” approach to geopolitics regardless of the major powers’ competition.

Having presented the general profile of India Post-Covid, it is safe to assume that India’s rise will depend on how well takes use of its young working population to position itself as a manufacturing power in order to compete with China, whose competitive edge is being eroded by an aging labour force and rising pay levels. Moreover, India needs to continue its infrastructure development process whilst promoting the image of a booming hub for foreign direct investments, especially through the full implementation of the Production Linked Incentive Scheme whose goal is to offer economic stimuli to the investors.

Nonetheless some potential salient sticking points that could challenge the emergence of India as an economic superpower do exist. These could be a prolonged global recession that could cloud India’s export business prospects, given India’s trade dependent economy. Among the risk factors is also the need for skilled human resources that India mostly lacks.


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