Reasons To Be Bullish

The building blocks are in place for 7-8% growth for a prolonged period; India’s focus should be on sustaining this momentum to become a developed nation

- BILL WINTERS

I HAVE BEEN a regular visitor to India for more than three decades, and every visit has been an invigorating experience. I have witnessed first-hand the significant changes in the economic landscape of the country. It is this economic transformation that gives India the runway to achieve its ambition of becoming a ‘developed’ nation by 2047, which also marks its 100th year of Independence.

In the face of global challenges such as the geopolitical tensions swirling around us all and multidecade-high inflation, India has the potential to generate differentiated success. Of course, as with every substantial undertaking, there are hurdles to overcome, but with a fast-growing economy driven by investment, innovation, and demographics together with macroeconomic indicators, India has a real opportunity to seize.

It took Independent India six decades to become a $1-trillion economy. Between 2007 and 2018, it more than doubled its GDP to $2.7 trillion. From 2018 to 2028, India is expected to emerge as the third-largest economy in the world, with a GDP of close to $6 trillion.

An important foundation of India’s economic resilience has been macro-stability, driven by consistent policymaking over the last decade. An outcome of this consistency is evident in the confidence to sustain 7% GDP growth. A key positive indicator has been the narrowing of the current account deficit over the last decade, due to the structural upshift in India’s services exports—which have now more than doubled in the last seven years and in quantum exceeds Saudi Arabia’s oil exports. Schemes like production-linked incentives (PLIs) and a build-up of the fourthlargest foreign exchange reserves of $667 billion, covering nearly a year of imports, also augur well for economic growth.