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India needs to seize manufacturing opportunity

  • Published
    7th Dec, 2023

Context 

Upskilling the workforce and boosting female labor force participation are imperative. This aligns with GDP estimates, emphasizing the importance of these measures.

Optimistic Economic Indicators

  • GDP Growth Surpasses Expectations:The National Statistical Office reported a robust 7.6% GDP growth in Q2, reinforcing positive medium-term growth outlooks.
  • Investor Confidence Post-State Elections:Stock markets show exuberance, anticipating reduced political and policy risks post-state election results.
  • S&P Global Predicts India's Lead: S&P Global predicts India as the fastest-growing major economy, foreseeing it becoming the third-largest by 2030.

International Economic Forecasts

  • IMF's Projections for India:IMF projects India's economy to grow at an average of 6.3% annually from 2023 to 2028.
  • Chinese Economic Slowdown:China's growth projected at about 4% per year, leading to concerns about its role as the driver of growth in the Asia-Pacific.
  • Moody's Negative Outlook for China:Moody's lowers outlook for Chinese sovereign bonds, citing risks in financial support to regional governments and state firms.

Opportunities and Challenges for India

  • India's Role in Global Supply Chains: S&P report places India and Vietnam as the fastest-growing emerging markets, benefitting from global supply chain rearrangements.
  • Critical Need for Logistics Infrastructure:The report emphasizes the necessity of a robust logistics framework for India to capitalize on manufacturing opportunities.

Demographic Dividend and Upskilling:To leverage the demographic dividend, India must focus on upskilling workers and increasing female labor force participation, as highlighted in the report.

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