{"id":5281,"date":"2023-01-28T15:32:22","date_gmt":"2023-01-28T15:32:22","guid":{"rendered":"https:\/\/ameforum.net\/?p=5281"},"modified":"2023-01-28T15:32:24","modified_gmt":"2023-01-28T15:32:24","slug":"india-is-a-true-bright-spot-in-the-midst-of-a-global-downturn-top-execs-and-policymakers-say","status":"publish","type":"post","link":"https:\/\/ameforum.net\/ar\/india-is-a-true-bright-spot-in-the-midst-of-a-global-downturn-top-execs-and-policymakers-say\/","title":{"rendered":"India is a true bright spot in the midst of a global downturn, top execs and policymakers say"},"content":{"rendered":"\n


By: Jenni Reid
<\/p>\n\n\n\n

With 2023\u2032s World Economic Forum in Davos dominated by discussions of economic growth, or a lack of in most developed countries, one nation was often cited as a bright spot.<\/p>\n\n\n\n

India is doing \u201cexceedingly well,\u201d said Bank of Japan Governor Haruhiko Kuroda in a closing panel at the event, while highlighting acute challenges facing its neighbors Sri Lanka, Bangladesh and Pakistan.<\/p>\n\n\n\n

Hype around the country was partly engineered, with Indian executives, officials and investment-seekers heavily represented at the Swiss mountain resort (though Prime Minister Narendra Modi was not in attendance).<\/p>\n\n\n\n

But India does shine out among the world\u2019s biggest economies, with Europe hovering on the brink of potential recession and U.S. growth slowing.<\/p>\n\n\n\n

And while the International Monetary Fund sees<\/a> China outpacing global growth once more in 2023 as the country reopens, its forecast<\/a> of a 4.4% rise in GDP is well below its estimate for India, of 6.1%. The Centre for Economics and Business Research thinks<\/a> India could speed past Germany and Japan to become the world\u2019s third-largest economy over the next decade, hitting $10 trillion by 2035.<\/p>\n\n\n\n

Several executives of non-Indian companies at the WEF summit, including Nokia\u2019s CEO Pekka Lundmark, highlighted India as one of their fastest-growing markets.<\/p>\n\n\n\n

Ericsson\u2019s head, B\u00f6rje Ekholm, said 5G infrastructure was rapidly developing there.<\/p>\n\n\n\n

\u201cIt\u2019s for the whole digital India, and creating a digital society in India,\u201d Ekholm told CNBC. \u201cThey\u2019re on a strong path with 4G but now they\u2019re building out 5G at an even faster pace.\u201d<\/p>\n\n\n\n

\"Europe<\/p>\n\n\n\n

Europe is falling behind on 5G, Ericsson CEO says<\/p>\n\n\n\n

India, he continued, \u201cwill very shortly have the best digital infrastructure outside of China,\u201d driven by telecoms juggernauts Bharti Airtel<\/a> and Jio, he added.<\/p>\n\n\n\n

\u201cThey are building out fast, that\u2019s going to help India digitalize, and if you compare that to what happens in Europe we are behind.\u201d<\/p>\n\n\n\n

India also has ambitions of becoming a global chipmaking hub<\/a>, as concerns grow about the West\u2019s reliance on Taiwan; and according to India\u2019s commerce minister, Apple wants to move<\/a> 25% of its iPhone manufacturing to the country (though this has not been confirmed by Apple). It is already a world leader<\/a> in digital payments; and is looking to develop in areas including solar, wind and green hydrogen production.<\/p>\n\n\n\n

<\/a>Strong tailwinds<\/h2>\n\n\n\n

\u201cWe are very optimistic and very positive on India,\u201d the chief executive of Tata Consultancy Services, Rajesh Gopinathan, told CNBC.<\/p>\n\n\n\n

He said the combination of a stable political environment and significant government investments in infrastructure were providing a positive environment for growth; and that the country was well-poised for the planned energy transition as it was \u201cbuilding out into a new element without legacy infrastructure to get out of.\u201d<\/p>\n\n\n\n

\u201cThe global economy and India\u2019s size has ensured there is enough capital available,\u201d Gopinathan said. \u201cSo you combine the demographics, the demand side, and the capital availability, I think the upside is significant. Of course it needs to be executed carefully, but it is there for realization.\u201d<\/p>\n\n\n\n

Despite future commitments on renewables growth and reaching net-zero emissions by 2070, India has benefited from buying Russian oil at a heavily discounted rate, while Europe has faced sharply higher prices, market volatility and fears of shortages.<\/p>\n\n\n\n

\"SBI<\/p>\n\n\n\n

SBI chair: Every country has the right to ensure their energy security<\/p>\n\n\n\n

Inflation has also been less severe in India than in many other countries, with CPI coming in at 5.7% in December.<\/p>\n\n\n\n

When asked by CNBC\u2019s Steve Sedgwick, Dinesh Kumar Khara, chairman of State Bank of India, said it was \u201cabsolutely\u201d true India was in a sweet spot compared to its rivals. <\/p>\n\n\n\n

He noted the country\u2019s vaccine rollout, its measures to tame consumer price growth helping to ensure food security, and its focus on infrastructure creation; though acknowledged inflation was still a \u201cmenace,\u201d and that drags on global growth would also impact the country.<\/p>\n\n\n\n

As Anish Shah, chief executive of Mahindra Group, told CNBC: \u201cIndia will get impacted. When the world goes through a recession<\/a> it\u2019s not as if India will be left out.\u201d<\/p>\n\n\n\n

However, he also said, \u201cWhat we do feel is the impact on India will be a lot less because of the inherent fundamentals in the country right now, and the fact that inflation in India really hasn\u2019t galloped away. It\u2019s well under control.\u201d<\/p>\n\n\n\n

<\/a>Not all rosy<\/h2>\n\n\n\n

A 2021 Deloitte report said<\/a> India still needs to go a lot further to build infrastructure and reform systems to improve the ease of doing business and attract more foreign investment.<\/p>\n\n\n\n

Some analysts also argue<\/a> its recent rise in capital inflows \u2014 with the Sensex stock market index up 5% over the last year while the U.S. S&P 500, Europe\u2019s Stoxx 600, China\u2019s SZSE Composite and Hong Kong\u2019s Hang Seng Index have fallen \u2014 is largely a result of relative stability compared to volatility elsewhere, and could slow when external factors change.<\/p>\n\n\n\n

\"Analyst<\/p>\n\n\n\n

Analyst discusses India\u2019s bid to become a global chipmaking hub<\/p>\n\n\n\n

Meanwhile the country still has one of the highest levels of income inequality in the world, which worsened<\/a> during the pandemic, and poverty persists \u2014 though by one gauge the poverty rate fell from<\/a> 55.1% to 16.4% over the last 15 years.<\/p>\n\n\n\n

Suyash Rai, a fellow and deputy director at research center Carnegie India, struck a note of skepticism on much of the bullishness from Davos.<\/p>\n\n\n\n

He points out<\/a> that recent GDP growth figures of 6.3% annually in the third quarter of 2022 and 13.5% in the second quarter were not much higher than the same periods three years ago, especially when stripping out government-controlled sectors; and that current growth rates are skewed due to the 6.6% pandemic-related contraction in 2020-2021.<\/p>\n\n\n\n

He also notes comparisons between developed and developing countries can be misleading, with the former naturally seeing more moderate growth.<\/p>\n\n\n\n

Rai told CNBC by email: \u201cWhile it is true that the Union Government\u2019s capital expenditure for infrastructure development has increased, it is not clear whether the total public sector capital expenditure has increased.\u201d<\/p>\n\n\n\n

And on claims of political stability, he responded: \u201cWe should not equate single party dominance with political stability.\u201d<\/p>\n\n\n\n

Modi has been prime minister since 2014.<\/p>\n\n\n\n

India\u2019s era of coalition politics from 1989 until then, Rai said, produced \u201cimpressive economic outcomes,\u201d he continued, with per capita income at constant prices tripling over 25 years, while economic growth slowed in the years before the pandemic.<\/p>\n\n\n\n

\u201cSo, the kind of stability that comes with a dominant party is neither necessary nor sufficient for rapid growth in India,\u201d he said.

(Source: CNBC)<\/p>\n","protected":false},"excerpt":{"rendered":"

By: Jenni Reid With 2023\u2032s World Economic Forum in Davos dominated by discussions of economic growth, or a lack of in most developed countries, one nation was often cited as a bright spot. India is doing \u201cexceedingly well,\u201d said Bank of Japan Governor Haruhiko Kuroda in a closing panel at the event, while highlighting acute …<\/p>\n","protected":false},"author":11,"featured_media":5282,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[219,186],"tags":[],"class_list":["post-5281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-219","category-186"],"_links":{"self":[{"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/posts\/5281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/comments?post=5281"}],"version-history":[{"count":1,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/posts\/5281\/revisions"}],"predecessor-version":[{"id":5284,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/posts\/5281\/revisions\/5284"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/media\/5282"}],"wp:attachment":[{"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/media?parent=5281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/categories?post=5281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ameforum.net\/ar\/wp-json\/wp\/v2\/tags?post=5281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}