Opinion

Advantage India

Niranjan Hiranandani | Updated on October 06, 2020 Published on October 06, 2020

Global economic scenario is in its favour now

It is really interesting times in India at the moment. Since the beginning of the year 2020, almost $20 billion investments have come into the country from some of the top technology companies of the US, such as Google, Facebook and Amazon. This is one of the most decisive moments in the Indo-American relations as the US-based companies formulate to benefit from the growing digital market In India.

According to the UN Conference on Trade and Development (UNCTAD), India was the 9th largest recipient of foreign direct investment to the tune of $49.97 billion. This was a 13 per cent increase from the $44.36 billion in the previous year when India was ranked 12th in FDI receipts. For the months between April and July 2020, the foreign direct inflows were to the tune of $20 billion. In the last few months, the Centre has opened up several key sectors such as defence, space and agriculture. And, there are several more sectors such as healthcare, energy, infrastructure, and civil aviation that offer huge investment potential.

What works in India’s favour?

Firstly, in size, India has the potential to almost replicate the market that China would offer to any prospective investor. India is the fifth-largest economy with a GDP size of $2.94 trillion and is the fastest growing trillion dollar economy in the world. In 2019, it overtook the UK and France.

In the post-Covid scenario, most countries are apprehensive about investing more in China and many have even contemplated migrating to similar destinations. The Centre is making a serious effort to get additional investments in India by offering tailor-made solutions, land at a cheaper rate and faster approvals.

There are a couple of things that work in India’s favour. The country offers a ready consumer market for several migrating industries. India’s consumer market has already reached a figure of $1.5 trillion and is expected to touch a figure of $6 trillion by the year 2030. It is expected to be the third-largest consumer market in the world in the next 10 years after the US and China. India needs to look for newer markets and get into bigger collaborations if it aims to take advantage of the present market conditions.

Changing world dynamics

The recent Israeli-UAE deal brings in more good news to the Indian shores as the country would get an opportunity to leverage its position to create a stronger geopolitical footprint. Both Israel and the UAE have been India’s strategic partners and its better equations in the Arab world would always be beneficial in the long run. India, too, at this juncture considers collaborating with some of the big players like the US, the UK, Russia and Japan to boost bilateral trade.

India has a liberal FDI policy that has also undergone several administrative reforms in the recent past. Barring a very few sectors, it has opened up most of the sectors for foreign direct investments. It is also taking substantial steps in introducing transparency in the tax procedures, installing confidence in investors as part of its larger reforms agenda.

There may have been setbacks due to the Covid pandemic but India has emerged as an ally that the powerful nations of the West won’t hesitate to shake hands with. The country must forge multiple bilateral agreements and aggressively invest to make it a $5-trillion economy.

The writer is President, ASSOCHAM

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Published on October 06, 2020
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