India’s meteoric rise continues unabated as Goldman Sachs projects its triumph over the US economy by 2075. Brace for a seismic shift in global economic power, as India emerges as the unrivaled powerhouse of the future.
The relationship between the oldest democracy and the largest democracy has not always been at its best. America’s initial indifference was best reflected in President Harry Truman’s reaction when Chester Bowles asked to be named ambassador to India: “I thought India was pretty jammed with poor people and cows round streets, witch doctors and people sitting on hot coals and bathing in the Ganges… Truman said: but I did not realize anybody thought it was important.” (Quoted by Shashi Tharoor).
Well, during the Cold War era, it was evident that the USA never saw India as an ally or partner. Later, after the fall of the USSR, in the post-Cold War era, global politics changed, and it became more Asia-centric today. The global order has completely shifted from a unipolar world to a multipolar world, where the USA’s banks are in debt, China is rising as a superpower, and the world is projecting India as a new economic giant. India has now become the most important country for the USA in Asia in many aspects.
Currently, when Indian PM Narendra Modi visited the USA, it was a clear sign that the USA wants the Indian market and economy for its own development. The USA has already promised India to give many important technologies and has also made some defense agreements.
But why has this change happened? Why does the USA need India as an ally at any cost? Well, in geopolitics, we often refer to a quote: “No Permanent Enemies, No Permanent Allies.” India was neither a friend nor an enemy of the USA in the past. But when India grew and its economy expanded, it led to the realization for the USA that they need India.
What is the future of the Indian economy, and how will it affect the USA?
Goldman Sachs, the second-largest investment bank in the world, has projected that India will overtake the US economy by 2075. It said that India will become the second-largest economy after China, overtaking the USA. Currently, the USA, China, Japan, and Germany are ahead of the Indian economy. What has led to this projection?
India’s Infrastructure Development
According to a report, more than 60% of Indian infrastructure has yet to be developed. This development of infrastructure needs trillions of investment, and we all know that investment brings employment, which is currently a big problem for the Indian economy. So when Indian infrastructure grows, it will attract the world’s investors, and India will surely become a hub of global investment. This will certainly lead to the rise of the Indian economy.
Demographic Advantages of India
Currently, as per a report, 65% of India’s population is young. So India has a great demographic advantage ahead of every country in the world. China’s population is aging, which gives India a step ahead. India just needs to train the youth and shape their skills. This will contribute hugely to the economy.
Large Market
India is currently the fifth-largest market in the world, with currently more than 1.4 billion consumers. This automatically increases the investments of the global economy in the Indian market. The Indian market can be well capitalized and grown by better infrastructure and development, which will lead to a boost in the economy.
India as a Growing Export Market
India’s overall exports are projected to scale new heights, growing at 13.84 percent during FY 2022-23 over FY 2021-22 to achieve USD 770.18 billion worth of exports. India has been in fiscal deficit, but it has been projected that it will come out of it in upcoming years. Indian exports are growing at a rapid pace, and India is trying to take over the global market. This is immensely increasing the Indian economy.
Transformation into Green Energy
Net-zero emissions will play a big role in shaping a country’s economy in the near future. India has already aimed to reach net-zero emissions by 2070. India is also aiming for alternative sources of power energy other than fossil fuels. It targets 50% of power capacity generation by non-fossil fuels by 2030. The government has already announced the Green Hydrogen Mission, which targets 5 MMT (Million Metric Tons) per annum of Green Hydrogen Production. Shifting from traditional sources of energy will definitely boost the Indian economy once it becomes fully operational and stable.
India is already the fastest-growing economy according to various reports. The IMF projected that China and India will account for half of the global economic growth in 2023. Increasing FDI is boosting the Indian economy at a large scale. Though the Indian economy is currently facing many problems, and it will continue to hurt the Indian economy in the upcoming future, problems like trade deficit, high rates of unemployment, high rates of unskilled youth, high poverty, high corruption, global recession, and high rates of inflation, Indian policymakers need to find a way to tackle these problems as soon as possible. Despite these challenges, it is projected that India will overtake the US economy by 2075.
Read More: International Affairs