The Indian economy is set to grow at the rate of about 7% over the next few years. It is now the world’s second-fastest growing one after China. In terms of purchasing power parity, it is the world’s fourth largest economy with a 300 million strong middle class. With two-thirds of its population still under 35 years of age, it offers unprecedented opportunities for investment returns in the near future.
Historically, India and China have contributed a quarter and a third of world economic output respectively. India’s Prime Minister Manmohan Singh presented this historic context in a speech this July at England’s Oxford University, where he earned his doctorate in economics in 1962:
“In 1700, India’s share of world economic output was 23.6 percent, larger than the combined economic output (23.3 percent) of the whole of Europe. By Independence (in 1947), after nearly 200 years of British rule, India’s share of the world's economy had shrunk to just 3.8 percent while Britain's alone had risen to nearly 25 percent.”
Colonialism resulted in a historic anomaly; a correction of which we are witnessing in our lifetime.
Goldman Sachs claims that India could be the world’s third largest economy by 2032. Deutsche Bank states this could happen by 2020 if economic reforms were pursued more aggressively.
Regardless of the actual date, one thing is for sure. India will become a powerhouse during our lifetime making strides each year toward become a fully developed economy. What happened over many decades in the West will happen within the next two decades in India.
Not surprisingly, we’re seeing growth in various sectors in India. While the well-publicized Information Technology and IT-enabled services industries will grow 34 percent this year, less known is that the automotive components industry will grow 29 percent, telecoms 22 percent, retail financial services 21 percent and media 18 percent.
The Indus View publication is designed to help you put a finger on the pulse of economic change and corporate activity in India. We’ve been at the forefront of this change for many years. We wish to share that excitement with you.
Bundeep Singh Rangar
Founding Members of IndusView Ltd