Posted November 13, 2015 Ashley Chadwick
The visit of Indian Prime Minister, Narendra Modi to the UK, highlights India’s growing prominence on the global scene. For a long time China was touted as the next major economy and growing superpower and it is clear from the events of this summer, it has reached that level. Ongoing fears of a slowdown in Chinese growth caused a fairly large sell off both in their stock market, as well as the global markets and the Federal Reserve has cited concerns over Chinese growth as a reason what rates haven’t increased yet. Now people are citing India as the next potential economic powerhouse.
The election of Modi in 2014 was seen as a major boost to India’s economy. Seen as business friendly, he has been doing a lot domestically to remove bureaucracy and red tape. He is also improving relations with the rest of the World, highlighted by the £9 billion worth of trade deals just signed with the UK. This is on top of the £22 billion the UK has invested in India over the past five years, making it the largest G20 investor there. India is returning the favour and currently invests more in the UK than it does in the rest of Europe combined. Outside factors are also benefitting India right now, with each $10 fall in the price of Oil, resulting in 0.5% increase in India’s GDP.
Whilst India is growing and improving its global positioning there is still a lot to be done before it is a superpower. India currently ranks 130th on the ‘Ease of doing Business’ index, immediately behind the West Bank and Gaza and 46 places below China. Corruption being a major reason behind its low rating and a lot has to change before it will be able to boost Global investment.
As ‘Modi Mania’ spreads both within India and globally, it remains to be seen whether this business friendly leader is the one to make India a global powerhouse.