India: A snapshot

India en route to becoming a global superpower

Sustained economic growth coupled with noticeable success in poverty alleviation over the past decade has accelerated the process of India's integration into the global economy which has turned India into a recognized global economic power in the true sense. India is now fast approaching the centre of the global economic order. The third largest economy of Asia is now the Bulls Eye for leading businesses across the globe.

Unprecedented resilience during COVID crisis and quick post-crisis recovery

• Comfortably returned to growth path after the momentary Covid-led recession in 2020-21 led by exemplary support package of Rs. 30 lakh crore by the government.
• Achieved highest-ever merchandise exports in 2021-22 at USD 419.2 billion
• Engineering exports also were at an all-time high at USD 112.10 billion in 2021-22
• Record high inbound FDI at USD 84.83 billion in 2021-22.
• Record high inbound FDI in engineering sector at USD 11.8 billion in Apr-Dec 2021-22
• Outbound Investments by Indians were also at record high at USD 16.3 billion in 2021-22.
• Signed three new FTAs with UAE, Australia and EFTA after a gap of more than a decade
• Rank in International Management Development (IMD)’s annual World Competitiveness Index improved to 37 in 2022.

Advantage India

Business-friendly government

• A reformist government in place with a series of investment-friendly measures including an effective combination of monetary and fiscal measures.
• Several unique policies launched to improve business sentiment and catch global businesses.

Economic progress in recent years

• One of the fastest growing economies with an average annual GDP growth of 7.2% in 2022.
• Significant achievement in poverty alleviation with over 271 million lifted out of poverty in ten years to 2016 as per UNDP.

Demographic dividend

• India will continue to have one of the youngest populations in the world till 2030.
• India has the third-largest group of scientists and technicians in the world.

Promise for world-class infrastructure: Plethora of opportunities for Global investors

• The government announced the National Infrastructure Pipeline (NIP), a first-of-its-kind initiative to provide world-class infrastructure across the country
• NIP was launched with 6,835 projects and has expanded to capture over 9,288 projects with a total project outlay of Rs 108.88 lakh crores between 2020-2025.
• Strategically important sectors like Energy (25%), Transport (42%), water & sanitation (15%) and social infrastructure (3%) sectors amount to around 85% of the projected infrastructure investments in India.
• Budget 2022-23 stressed on four priorities, PM GatiShakti, Inclusive Development, Productivity Enhancement and Investment and Financing of Investments.

Noticeable improvement in business sentiment led by many reforms

• The incumbent government since its very inception adopted a series of long-pending reform measures to make India a more competitive economy on the global platform.
• First-of-its-kind initiatives like ‘Make in India’, ‘Digital India’, ‘Smart Cities Mission’ etc. have created substantial scope for overseas businesses to participate in India's process of economic development and turn India into a ‘Global Investment Hub’.
• GST, the biggest tax reform since independence, paves the way for a common national market
• As a consequence of the business-friendly policies of the government, Inbound FDI has risen continuously since 2012-13 and has reached an all-time high of US$ 84.83 billion in 2021-22.
• Interest rate has also remained very much business conducive for the last few years

Efficiency in addressing adversities: Exemplary response to escape the pandemic shock

• Hon'ble PM Shri Narendra Modi announced a special economic and comprehensive package of nearly Rs. 30 lakh crore, which is equivalent to 15% of India’s GDP, under the Atmanirbhar Bharat Abhiyaan (Self-reliant India) announced in three phases.

Rising economic influence

• Centre of global maritime trade to move from the Pacific to the Indian Ocean Region. India and China will be the largest manufacturing hubs in the world by 2030.
• Connectivity with Central Asia and Europe via the multi-modal International North-South Transport Corridor (INSTC) has been projected to reduce the transit time, leading to greater influence of India in Asia Pacific, Central Asia and Europe.

India at a glance

* Apr-Feb

@ Apr-Dec

# Apr-Jan

Source: IMF; D/o Commerce, Govt. of India; DPIIT, GoI.

New Foreign Trade Policy 2023: A Concrete Plan to Strengthen India's Global Grip

• A unique and more flexible policy with no time limit attached
• Emphasis on International Trade Settlement in Rupees
• Export promotion through collaboration-Exporters, States, Districts, and Indian Missions
• Streamlining SCOMET licensing procedure
• Facilitation for E-commerce exports with plan for designated export hubs
• Special effort to boost manufacturing
• Special one-time Amnesty Scheme for default in Export Obligations

India's Participation in Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs)

• India-Australia Economic Cooperation and Trade Agreement (ECTA)
• India-UAE Comprehensive Economic Partnership Agreement (CEPA)
• ASEAN-India Comprehensive Economic Cooperation Agreement
• India-Japan Comprehensive Economic Partnership Agreement
• India-Malaysia Comprehensive Economic Cooperation Agreement
• India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement
• India-Republic of Korea Comprehensive Economic Partnership Agreement
• South Asian Free Trade Area (SAFTA)
• Agreement on SAARC Preferential Trading Arrangement (SAPTA)
• Asia Pacific Trade Agreement (APTA)
• India MERCOSUR PTA
• India Afghanistan PTA
• India-Chile Preferential Trading Agreement
• India-Singapore Comprehensive Economic Cooperation Agreement
• India-Sri Lanka Free Trade Agreement
• Agreement of Cooperation with Nepal to Control Unauthorised Trade
• Agreement on Economic Cooperation between India and Finland
• India-Africa Trade Agreement
• Trade Agreement between India and Argentina
• India Afghanistan PTA
• Agreement of Trade, Commerce and Transit between the Government of the Republic of India and the Royal Government of Bhutan
• India-UAE CEPA
• India-Australia ECTA

Inclusions in 2023

• India-EFTA Trade and Economic Partnership (TEPA)

Major investments in recent years

• In August 2023, the global investment firm Temasek invested Rs. 1,200 crores (US$ 14415 million) in its electric vehicle subsidiary Mahindra Electric Automobile Ltd (MAEL).
• In Q1 (January-March) of 2023, the largest funding deal was the Rs. 5,700 crore (US$ 700 million) investment by global private equity investors, GIC and Abu Dhabi Investment Authority (ADIA) in clean energy-focused, Greenko Group.
• During February 2023, Investment of US$ 20 million each in electric vehicle (EV) fleet operator Zypp Electric (led by Taiwanese EV maker and battery-swapping company Gogoro) and in commerce enablement platform for MSMEs Mintoak (led by PayPal Ventures with participation from British International Investment or BII and existing investors).
• In July 2023, Jio Financial partnered with BlackRock announced plans to launch an asset management firm with a combined investment of US$ 300 million.
• In June 2023, Allcargo Logistics invested Rs. 406.71 crore in Gati-Kintetsu Express (GKEPL).
• In May 2023, JSW Steel announced to acquire National Steel and Agro Industries for Rs. 621 crores.
• Tata Communications invested US$ 100 million to acquire US-based enterprise Kaleyra, an omnichannel integrated communication services provider with a set of proprietary platforms.
• In January 2023, Virohan, a healthcare edtech start-up raised US$ 7 million from Blume Ventures, with participation from Bharat Inclusion Seed Fund, Rebright Partners, and others.
• In November 2022, Affle Global Pte. Ltd (AGPL) announced funding of Rs. 130 crore to CashKaro for the expansion of new technology and product development.
• In September 2022, the Hero Group and US private equity company KKR will invest US$ 450 million in Hero Future Energies (HFE). Along with eventually entering new markets, the investment will assist HFE in increasing capacity and capabilities across technologies like solar, wind, battery storage, and green hydrogen.
• In June 2022, National Investment and Infrastructure Fund (NIIF) announced investment of Rs. 2,250 crore to acquire substantial stake in Hindustan Ports Pvt. Ltd (HPPL).
• In May 2022, Bodhi Tree announced plans to invest US$ 600 million in ALLEN Career Institute to build India's largest test-prep company.

Recent Developments

• India ranked as the 48th most innovative country among the top 50 countries, securing 40th position out of 132 economies in the Global Innovation Index 2023.
• The 13th round of FTA negotiations between India and UK took place from the 18 September to 15 December, 2023. The 14th round of FTA negotiation will take place in January 2024 to unlock business opportunities and generate jobs.
• Production Linked Incentive (PLI) scheme launched for selected strategically important sectors to substitute import, enhance production and ensure employment.
• Labour markets have recovered beyond pre-covid levels, in both urban and rural areas, with unemployment rates falling from 5.8% in 2018-19 to 4.2% in 2020-21
• India becoming a favoured destination for renewables; investments in 7 years stand at US$ 78.1 billion.
• Around 130 SME companies went public in 2023 (till October 2023), raising a total of Rs. 3,540 crore (US$ 426.33 million) through IPOs.

Way forward

Ambitious targets to facilitate business and to attract investments

• India is all set to become a USD 5 trillion economy by 2027-28
• Merchandise exports is also targeted to cross USD 1 trillion by 2030
• India is set to become a completely developed economy by 2047 under the ‘Viksit Bharat 2047’ initiative
• India’s electronic production isexpected to reach USD 300 billion by 2025-26.
• Target to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30%
• The government plans to increase its installed renewable energy capacity to 450 Gigawatt (GW) by 2030.
• ‘Make in India’ drive will continue to bring global investors to enhance production and exports.
• ‘Atmanirbhar Bharat Abhiyaan’ to boost confidence of businesses, especially of MSMEs and to reduce dependence on imports.
• According to a Boston Consulting Group (BCG) report, India is expected to be the third largest consumer economy as its consumption may triple to USD 4 trillion by 2025
• According to a report by Price Waterhouse Coopers (PWC), India to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040.