This is a classic case of a country that gains from another one that’s losing.
India has now become the investor’s emerging market darling, given the slowdown in the country’s closest competitor, China. Both countries form parts of BRIC grouping, that is Brazil, Russia, India and China. Given the slowdown and political risks permeating Brazil and Russia, the investors have shifted their investment focus to the remaining 2 countries. However, China has been experiencing economic slowdown, aided by reduction in demand as well as production growth, India seems likely as the next investment destination. For once, due to the plunge of oil price, India’s inflation has slowed and current account deficit has narrowed. India’s economic growth is outpacing that of all other large nations at around 7.5%. Meanwhile, the other members of BRIC have all lost momentum.
Half of India’s massive 1.25 billion population is 25 and under, implying a robust future workforce. According to IMF, Indian economy expands by 7.5%, beating China since 1999. It is also predicted that by 2030, its labor force may increase to 300 million, equal to countries like Germany, Spain, Italy and French combined.
The growth and development in India are largely dependent on president Narendra Modi’s vision, where he’s paving the way for growth by allowing foreign investment in railways and has also raised the limit for foreign ownership in defense and insurance industries. He’s also fond for telling the investors, “a red carpet, not red tape” awaits them.