India positions to become a $40 trillion economy in the next 25 years

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Highlighting “India’s success story,” over the past decade under Prime Minister Narendra Modi’s leadership, India’s Minister of Commerce and Industry Piyush Goyal, stressed that the country is on track to become a developed nation by 2047.

Speaking at the event “India’s Evolving Manufacturing Landscape,” hosted by the Center for Strategic and International Studies (CSIS) on October 3, 2024, in Washington D.C., Goyal expressed India’s ambition to grow its economy from $4 trillion to $40 trillion in the next 25 years. He also participated in a Q&A session with Senior Adviser, and Chair in U.S.-India Policy Studies, CSIS, Richard Rossow.

Goyal emphasized that India is widely seen as a reliable global partner, playing a key role in powering the world economy. He stated that India has earned trust from democratic nations that value the rule of law in trade and business.

He also underscored that despite current challenges posed by ongoing Russia-Ukraine and Israel-Gaza conflicts, and the Red Sea crisis affecting international trade, India’s economy expanded by 90 per cent while the global economy grew by 35 per cent.

The minister also noted Prime Minister Modi’s efforts since 2014 in “rebuilding relationships,” with the United States, Europe, Southeast Asia, and others.

“In Fact, in the first few years, we even made a very serious effort to have very good relations with both Pakistan and China, both our neighbors with whom we’ve had relationship problems for years,” noted Minister Goyal. “Mr. Modi gave it a full shot, made every effort, even to rebuild business and relations with these countries, and I think these relationship building efforts across the world continue to bear fruit, even today.”

Recalling India’s experience during the pandemic, Goyal expressed, “India navigated COVID very well,” in its management of the economy, health risk, and vaccination program through technology. He added, “We introduced probably the world’s most severe lockdown, and the people of India trusted Mr. Modi enough to strictly abide by the lockdown. But when the economy needed to come back into shape, we brought the economy also, very quickly back in shape.”

He further highlighted India’s initiatives to establish 20 new industrial smart cities nationwide, emphasizing a significant push to lower logistics costs, improve connectivity, and implement various measures to create jobs, enhance manufacturing competitiveness, and boost India’s share in global trade.

To boost “investor confidence and expand employment opportunities,” he mentioned that India is reinforcing its macroeconomic fundamentals and streamlining business operations. This includes simplifying over 40,000 procedures, government practices, and compliance regulations.

Minister Goyal also reflected on the early decades post-independence, noting that India’s manufacturing sector was largely government-driven, which led to missed opportunities and a lack of focus on efficiency.

“I think those three or four decades, India remained a very inconsequential player in the world economy in terms of our manufacturing. Between 1991 to 2014 India had made certain strides in manufacturing. We had given a serious thrust to private sector participation in manufacturing,” he noted adding from 1998 to 2006, India made further efforts to liberalize the markets.

After the 2008 global financial crisis, and by 2014 “India was considered a fragile five economy, one of the biggest five economies in the world, with very low growth rates,” he stressed.

Additionally, he pointed out that during that period, India was plagued by several scandals, including irregularities in coal mine allocations, telecom spectrum allotments, and corruption related to the Commonwealth Games and space missions.

“In a way, the moral of the country was very weak at that point of time in 2014 and investors across the world were very hesitant to work with India. There was a concern about stability of policy, about predictability of tax laws.”

However, the launch of the “Make in India,” initiative on September 25, 2014, marked a turning point, boosting confidence both within India and globally. Last month, India celebrated the program’s 10th anniversary, he added.

He emphasized that a series of initiatives under the “Make in India,” umbrella helped revitalize India’s manufacturing sector. Over the past decade, India implemented various measures to support this effort, recover from the “policy paralysis” of the preceding years, and position itself as a global manufacturing hub.

Due to those initiatives, he emphasized “we saw our inflation rates come down, and for almost 10 years of the Modi government, our average inflation has been the lowest that any decade in the past has witnessed in India.”

Elaborating on India’s plans for the next 10 years, he expressed that it is reflected very well with PM Modi’s vision for a self-reliant India.

But he clarified, “But when we talked about a self-reliant India, we were not looking at closing India’s doors to international engagement,” adding “On the contrary, what Prime Minister Modi was trying to do was develop our skill sets, develop our manufacturing abilities, where we have the competitive advantage, but also open the doors to international engagement, international relationships.”

He emphasized that India is focused on attracting foreign investment, boosting trade—both imports and exports—and positioning itself as a key player in global trade, across goods and services.

President, Economic Security and Technology Department, CSIS, Navin Girishankar, welcomed the gathering at the event attended by Indian Ambassador to the United States, Vinay Kwatra, Deputy Chief of Mission, Ambassador Sripriya Ranganathan, several senior officials, and students.

(Used with permission from South Asian Herald)