The economy of India Next SuperPower. will India challenge us and china? When the world is heading towards recession in 2020, can India become the next superpower while its unemployment and inflation are on the Rise? Let’s find out here.
In 1991 when the Soviet Union collapsed, India opened its doors to the world’s Economies. As India was the major trade partner for the Soviet Union, India was having a closed-door trading after its independence from Great Britain in 1947. This is why everything changed and started to play well for India. The western countries started to come in with foreign investment with the help of the IMF and the World Bank in India. India became one of the biggest contributors to the 90s economic Revolution.
India went on to get a huge change, which includes Reduction of import tariff, reduction of taxes, deregulations of markets and foreign direct Investments. The liberation in the 90s credited India’s economy to Skyrocket from 1990s to 2000s.
Before 2015, India’s GDP went at a slower pace behind China, But in the same year, India surpasses China as the world’s fastest-growing economy from 2005 to 2012. Lots of foreign investment started to pour in, companies like Microsoft, Siemens, Motorola, Foxconn, Nokia, Samsung, Vodafone, Google, Amazon, MTS, Uninor, Big automobile companies and The FDI investment in infrastructure development.
The average annual rate has grown by,
3.5 % from 1950 to 1980 and
7.7 % from 2002 to 2012
The annual rate peaked at 9.5 % from 2005 to 2008.
India’s per capita also increased (GDP) from,
USD $2455 in 1978
USD $3042 in 2005
USD $3900 in 2012
Jobs in technology and business sector boomed, many new Indian companies were born like Flipkart, GoAir, Indigo, Kingfisher, Snapdeal, Ola, Infibeam, Mahindra & Mahindra, Infosys, Idea Cellular, Adithya Group, Big Bazaar Zomato, Swiggy and many BPO companies. Despite so many red tapes removed, many foreign companies came in and many Indian companies were born. Still, unemployment was rising by 2.5% yearly. Indian states like Gujarat, Maharashtra, Tamil Nadu and Karnataka were contributing most to the Indian economic growth and jobs. In the other states of India, they were not attracting many Investments. That was the time, the world economy was hit with the recession in 2008 to 2009, The U.S, Europe, China was struggling and India was surviving.
The Indian government in 2012 Loosen the FDI rules by 51% in the retail, multi-brand outlet and in 2019, FDI in the retail outlet has become 100%.
After 2013, India saw the growth in all sectors after the 2008 and 2009 recession, thanks to former Indian Prime Minister Manmohan Singh. Later, the Indian government changed in 2014, Mr Narendra Modi took office as PM of India, with the promise of making India Glorious. India was going on the right track to becoming the fastest growing economy in the world and that it happened in 2015. The Economist around the World started to predict that India will become a superpower within 10 years to 20 years behind the US and China. After 2015, then came the Chinese companies like OPPO, Vivo, Xiaomi, Tencent, Alibaba, Huawei, Chinese banks with investment in Indian companies Like, Paytm, Zomato and Swiggy and the in 2016 something big happened, which India still didn’t recover from it, the Indian government demonetised its high-value currency, which created panic among the Indians, investment dropped, 85% of the cash flow was stopped, inflation started to rise, India falls far behind the China and India lost its fastest-growing economic status.
While still, India is recovering from its biggest economic downfall, Flawed taxation called GST, which moved its economy into jeopardy. Traders were not happy and the foreign investment started to pull all the money out of India. Many Indian companies started to go bankrupt, unemployment Spiked to the highest in Indian history. Unemployment started rising by 41%.
After 2013, 3/4th of Indian and the Foreign Companies which started before 10 years in India were gone. Even after 2018, India was still losing its GDP growth rate gradually to 4.5%. Which, India should have achieved a GDP growth of 7.5%.
The world economy started to shatter more, India’s unemployment going into the lifetime highest, no company’s coming in, with FDI inflows reduced very much, India’s dream of becoming a superpower is now not on the agenda. But India sorts out its mistake slowly, but it has a long way to catch up with its dream and becoming a superpower. In June, July of 2020 India banned Chinese Businesses in India, which have a paved way for Western countries to start a business now in India. Companies like Apple coming in, Foxconn is expanding in India, we have to wait and watch how India growth goes.