India en route to become 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 that has turned India into a recognized global economic power in true sense. India is now fast approaching towards 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 Achievements at the time of unprecedented crisis

• Comfortably returned to growth path after the Covid-led recession in 2020-21, growth is projected at 8.9% in 2021-22
• Achieved highest ever merchandise exports in 2021-22 at USD 419.2 billion
• Engineering exports also was at its all-time high at USD 112.10 billion in 2021-22
• Record high inbound FDI at USD 81.97 billion in 2020-21
• Record high inbound FDI in engineering sector at USD 9.03 billion in Apr-Dec 2021-22
• Investments by Indian businesses in foreign soil were also at its highest in recent years at USD 16.33 billion in 2021-22
• Signed two new FTAs with UAE and Australia after a gap of more than a decade
• Improvement of 67 rank from 130 to 63 between 2017 and 2020 in World Bank’s Doing Business Ranking - among the top 10 economies showing “the most notable improvement”.
• Able to retain its 43rd rank on the Institute for Management Development (IMD)’s annual World Competitiveness Index over the past three years with major advancements in government efficiency in 2021

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 growth of 6.7% in the last decade before the emergence of COVID
• 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), first-of-its-kind initiative to provide world-class infrastructure across the country
• Nearly 7,000 projects across different sectors costing above INR 100 Crore per project and totaling INR 111 Lakh Crore have been identified
• Strategically important sectors like Energy (24%), Roads (18%), Urban (17%) and Railways (12%) amount to around 71% 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 a number of 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 reforms since independence, paves way for a common national market
• As a consequence of business friendly policies of the government, Inbound FDI rising continuously since 2012-13 and estimated to have reached an all-time high of US$ 81.72 billion in 2020-21
• Interest rate has also remained very much business conducive for the last few years
• Notable upliftment in Doing Business ranking was certainly the result of apt policy making by the government.

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 of the world by 2030.
• Connectivity will be established with Central Asia and Europe via the International North-South Transport Corridor (INSTC) leading to greater influence of India in Asia pacific, Central Asia and Europe

India at a glance

* Data for Apr-Feb 2021-22.

# Data for Apr-Dec 2021-22

Source: IMF; World Bank; DoC, Govt. of India; DEA, Ministry of Finance, GoI; DIPP, GoI.

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

• ASEAN-India Comprehensive Economic Cooperation Agreement
• India-Japan Comprehensive Economic Partnership Agreement
• India-Singapore Comprehensive Economic Cooperation Agreement
• India-Sri Lanka Free Trade 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
• Asia pacific Trade Agreement
• India-Chile Preferential Trading Agreement
• Global System of Trade Preferences – PTA
• Agreement of Cooperation with Nepal to Control Unauthorised Trade
• Agreement on Economic Cooperation between India and Finland
• Trade Agreement between India and Argentina
• India Afghanistan PTA
• India MERCOSUR PTA
• Agreement of Trade, Commerce and Transit between the Government of the Republic of India and the Royal Government of Bhutan

Inclusions in 2022

• India-UAE CEPA
• India-Australia ECTA

Major investments in 2021-22

• In February 2022, Adani Total Gas Ltd announced its investments in Rs. 20,000 crores (US$ 2.67 billion) in the city gas sector over the next 8 years.
• In Jan 2022, Bharti Airtel announced that Google would invest up to US$ 1 billion in return for 1.28% ownership to enable affordable access to smartphones.
• In January 2022, Zomato announced plans to invest Rs. 112 crores (US$ 15 million) in ad-tech company Adonmo and Rs. 37.38 crores (US$ 5 million) in UrbanPiper.
• In December 2021, Indian Oil Corporation announced its plans to invest Rs. 9,028 crore (US$ 1.2 billion) to lay a new crude oil pipeline from Gujarat to Haryana.
• In September 2021, Welspun India Ltd. announced to invest Rs. 6.57 billion (US$ 89.4 million) to enhance manufacturing capacity and cater to overseas demand.
• In July 2021, Maruti Suzuki announced plans to invest Rs. 18,000 crore (US$ 2.45 billion) for establishing a new plant in Haryana.
• In July 2021, Capital India announced to invest US$ 25 million in Credenc, an education lending fin-tech platform, to strengthen capabilities in digital financial products.
• In July 2021, TVS Motor announced to invest Rs. 1,000 crore (US$ 135.84 million) to manufacture electric vehicles in India.

Recent Developments

• Budget 2022 has announced to reform the 16-year-old Special Economic Zone (SEZ) act to enhance competitiveness this will be done to make it compatible with the World Trade Organisation (WTO).
• FTA negotiation between India and UK is likely to begin soon to unlock business opportunities and generate jobs.
• Production Linked Incentive (PLI) scheme launched for selected strategically important sectors to enhance production and ensure employment.
• India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure during 2019-23
• Ensuring social security to encourage economic activities by fully vaccinating 62.6% of the vast population

Way forward

Ambitious targets to facilitate business and to attract investments

• India is all set to become a USD 5 trillion economy by 2024-25.
• Merchandise exports is also targeted to cross USD 1 trillion by 2027-28
• India’s electronic exports are expected to reach USD 300 billion by 2025-26 USD 67 billion FY2021-22 (till December 2021).
• Target to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30%
• The government plans to increase its renewable energy capacity from to 175 gigawatt (GW) by 2022.
• ‘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 PricewaterhouseCoopers, India to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040.