These 4 trends could lead to a 7% GDP growth in the next decade: Let's find out
Narendra Modi is embracing a liberalization and globalization growth model. While investors are aware of India’s ambitious targets for growth, exports and consumption, they may be less aware of the commitment to innovation and liberalization required to achieve these targets, it stated. These, as per the report, include: 1.
India technology stack: the Unified Payments Interface (UPI) is creating a cascade of innovation. 2. Infrastructure: new fast trains with dedicated freight corridors between major cities, and a focus on renewable energy.
3. Production Linked Incentives (PLI) and a focus on manufacturing for export. 4.
Pursuing free trade agreements and the India-Middle East-Europe trade corridor. The translation of these reforms to economic growth is essential for investors given the high correlation between gross domestic product (GDP) and earnings growth in India, it noted. "The proposed Indian-Middle East-Europe rail corridor is among the most significant new developments.
The project builds on the plans to significantly increase manufacturing capacity currently underway. The PLI and manufacturers’ China+1 strategy, in turn, drives this. India’s renewed emphasis on pursuing free trade agreements with its trading partners also complements it.
Innovation in the technology and finance sector is creating employment opportunities and democratizing access to credit in the economy. The multiplier effect of this is only starting to be recognized. Taken together these policies have the potential for India to achieve its target of 7 percent GDP growth over the next decade which, if achieved, should attract more investors to the equity market as well as enhance its outlook, in our view," it rationaled.
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