India seeks to fill a China-sized gap in global economic growth
China increasingly isolated and the US and its allies seeking a developing-market champion, India is having a moment.
But is it ready?
The tailwinds are there. The $3.4 trillion economy is among the fastest growing globally, and India’s population became the largest in the world earlier this year.
Prime Minister Narendra Modi’s government has sought to compensate for low private investment by plowing billions into new infrastructure and using a mix of tariffs and incentives to lure global manufacturers, especially those seeking to diversify away from China.
India will contribute just over 15% to global growth this year, according to the International Monetary Fund, right behind China’s 35% and more than the entire Western hemisphere’s 14%.
It’s in a geopolitical sweet spot, with Modi seeking to assert leadership of the so-called Global South amid support from the US to counter Beijing.
But behind the bullish population growth lies a serious youth unemployment problem, and for every billionaire there are still hundreds of thousands in poverty, unable to access the nascent consumer market that has multinational companies flocking to the country.
Booming India is a salve for global investors in the face of a slowing China. Whether it can seize on that opportunity remains to be seen.
