There's a rising tide of interest for business in India by global corporations

Business Tuesday 02/May/2023 07:31 AM
There's a rising tide of interest for business in India by global corporations

New Delhi : Apple CEO Tim Cook's visit to India, the latest by a top global executive, exemplified the rising tide of interest that corporations are showing in doing business with India, reported CNN Business.

Cook was in India last month for launching two Apple physical stores -- in New Delhi and Mumbai -- where he was welcomed with huge cheers. According to the CNN Business report authored by Michelle Toh and Hanna Ziady, just days after his landmark trip, Pret A Manger, a trendy British sandwich chain, set up its first outlet in the commercial capital of Mumbai, as it bets on the country's growth. middle class.

Citing calculations from the United Nations India where it said India will surpass China to become the world's most populous nation, the CNN authors feel it will only cement its growing image as the "darling of the global economy".

"The case for investing in India -- a nation of 1.4 billion -- is clear, and only bolstered by recent geopolitical shifts. As Western leaders look to boost economic cooperation with countries that share similar values, India, the world's largest democracy, stands to gain," they said.

Until recently, many countries and companies "had put all their eggs in the China basket", said Partha Sen, professor emeritus at the Delhi School of Economics, according to the article. Now, as tensions continue to flare between the West and China, there is "a move to diversify away, and India fits right into it," Sen was quoted as saying by the CNN Business authors.

The authors attributed India's economic growth potential to its "demographic dividend". Also, the signing of free trade deals with various countries has been warmly received around the world.

"Since 2021, India has struck agreements with Australia, the United Arab Emirates and Mauritius. It is also negotiating deals with the European Union, the United Kingdom and Canada," the CNN Business authors noted.

Russia, whose trade with the West has slumped since its invasion of Ukraine last year, is also interested in increasing ties with India, they added.

The US and India have taken steps in recent months to strengthen their ties, particularly in defence and technology, as they attempt to counter the rise of an increasingly assertive China.

In February, Air India bought more than 200 aircraft from Boeing (BA) in what was the American planemaker's third-biggest sale ever. US President Joe Biden hailed the deal saying that it was "the strength of the US-India economic partnership".

While several countries are pivoting towards India, evincing an interest to invest across sectors, the IMF is also largely bullish on the country.

The International Monetary Fund expects India to outperform all major emerging and advanced economies this year, logging GDP growth of 5.9 per cent. By comparison, the German and UK economies will stagnate while the US is expected to grow only at 1.6 per cent.

If it can maintain its momentum, India will overtake Germany as the world's fourth largest economy in 2026 and knock Japan from the number three spot in 2032, the CNN Business report quoted an analysis by the Centre for Economics and Business Research.

Going ahead, India will benefit as companies diversify their supply chains away from China but obstacles remain.

Alexandra Hermann, a lead economist at Oxford Economics, cited three obstacles -- stringent labor laws, high import duties and logistics challenges.