The Indian Economy - Booming but not quite like China yet!
The outlook for the Indian economy is generally positive with growth >7% expected to continue in 2007 and beyond.
Below is a summary of a downloadable report.
Economic Report Summary
The outlook for the Indian economy is generally positive with growth >7% expected to continue through to 2010 and longer term growth is generally seen as positive until 2030.
India has had some lower growth periods, in line with the global economy but has continued to open up and liberalise since 1991. The Rupee has been allowed to fall in value and is now more realistic than the Rs35 = £1 in mid 1991. Export Processing Zones (EPZ), Special Economic Zone schemes (SEZs) and Industrial Entrepreneurs Memorandum (IEM) have all helped boost growth. Foreign Direct Investment (FDI) continues an inward flow, as improvements are seen in liberalisation and transparency, although limits on foreign ownership vary.
China is a key trading partner but half of the $18-20Bn export revenue is from steel and a further $2-3Bn is other minerals. Chinese exports to India are likely to grow and demand for Indian processed steel may fall as more domestic production comes on line. India is looking to expand trade with China where it has a competitive advantage and to become more competitive in other areas.
Key Points
• A buoyant and growing economy with a huge potential consumer base.
• The ruling Congress I coalition government looks to have established a policy to support continued liberalisation in spite of holding back on some planned privatisation.
Government Objectives
• Sustain productivity growth
• Increase employment and optimise human resources
• Increase international competitiveness to become a major global economic player
• Increasing transparency and openness - an ever reducing set of barriers to business
• Foreign Institutional Investment (FII) is strong, rising 15 fold in 2003/4 to approx $10Bn
• The government has targeted growth in both manufacturing and services
--- The pharmaceuticals sector is growing rapidly
--- Developments in IT and Life Sciences already being seen with key multi-national players
--- Nano-technology likely to be next and is on the wish list of several states.
Economy Comments
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Mail to: economy@bajwa-brady.com
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