“A novel confluence of forces stands to transform the Indian economy over the next decade improving the lives of 1.4 billion people and transforming the balance of power in Asia. As the country emerges from the pandemic, however, a new pattern is visible. It is unlike anything you have seen before. These changes explain why India is slated to be the fastest growing big economy in the world in 2022 and …… has a chance of holding on that title for years.”
-The Economist, 13th May 2022
The IMF’s latest World Economic Outlook shows India as the fastest growing large economy in the world in 2021 and 2022 with growth rates of 8.5 percent (assisted by the base effect) and 6.8 percent for 2021 and 2022 respectively. IMF’s projections for India’s GDP growth are 6.1 percent for 2023 rising to 6.4 percent in 2024. This confirms the transformation that ‘The Economist’ spoke about in May 2022.
Developments in corporate plans and investments further confirm the strong and steady transformation happening in the Indian economy. Let me cite a few examples. The recent announcement by Air India to buy 470 planes from Airbus and Boeing at a cost of $80 billion took even the India optimists by surprise.
The Tatas have a grand vision of making Air India a world-class global carrier. This deal has been widely reported in the international media and positive comments from President Biden and President Macron hogged media headlines. This Air India deal is a classic case of the India Growth story benefiting the Developed world, too.
Another mega project, again involving the Tatas, is the Tata – Airbus project to manufacture transport/defense planes in Gujarat. This is the first of its kind involving Airbus in an emerging economy. Yet another mega project is the upcoming Tata Electronics project in Hosur to manufacture Apple iPhone 14, which is estimated to generate around 60000 jobs. India has already emerged as the largest exporter of mobile phones in the world with exports likely to exceed $10 billion in FY23. Reliance’s massive investment of Rs 75000 crores in green energy ecosystem is slated to come up in Gujarat in the next few years. In the recently concluded Global Investor Meet, Uttar Pradesh has succeeded in getting investment proposals for an incredible Rs 3.5 trillion from business groups like Ambani, Tatas and Birlas. The message is loud and clear.
There are other megatrends transforming the Indian economy. India’s JAM (Jandhan-Aadhar-Mobile) trinity has emerged as an efficient, model social security system. Digitization is in fast forward mode and formalization of the economy is gaining momentum ushering in a cleaner economy.
Emerging India provides a great opportunity for investors. India is presently a $ 3. 5 trillion economy with the potential to become a $ 8 trillion economy by 2032. The consequence of this transformation would be unprecedented wealth creation through the stock market. Investors should adopt a simple strategy to benefit from this investment: Invest systematically in high quality stocks either directly or through mutual funds/ PMS. Heed the right advice and invest right. Profit from the India Growth Story.