India is one of the largest emerging economies of the world. The country is home to a large young population. Right now it is the country to the northwest of India, which is the largest emerging economy in the world.
India’s northwest neighbor, China, is no doubt the 2nd largest economy in the world. But India is also growing rapidly. Similar to China, India also has a large growing population with strong and robust economy. On the basis of purchasing power parity (PPP), the country ranks as the 3rd largest economy.
South Asian giant offers an amazing opportunity for investors from North America and the European Union (EU). It is a destination where the foreign direct investment will get excellent returns. New Delhi’s strong economic growth is impressive.
High growth of the country will be sustainable considering the young and educated population. However, there are numerous risks of investing in south Asian nation that one keep in mind. For investors, it is imperative to be not only mindful of positives but of the negatives.
After the economic reforms of 1991-92, India registered high growth rate. It also became famous for its Information Technology (IT) and business process outsourcing (BPO). It ranks 12th in the factory output worldwide. The country also ranks 2nd in farm factory output.
Top Reasons to Invest in India
Young Demographics
India has got young workforce which is growing faster than anywhere else. It is the lever that can sustain the high growth trajectory of the Indian story. Moreover, the young people have the skills and education to propel the economy in the right direction. The country has got an excellent education system for imparting skills so relevant for facing the challenges of 21st century.
There is no denying the fact that it is the young people that derive the economic development and growth. Over 85 per cent of the population is below the age of 55 years. We are the only country which is so predominantly so young. Entrepreneurs and workers under the said bracket are the most productive. The country does have to bear the burden of pensions unlike most of the western countries.
If India is to grow consistently at a higher growth rate it must invest in the education and skill development of its young demographics. It is an opportunity it cannot afford to lose as the demographic dividend can have opposite effects also. It can happen only when there is no economic growth and no job creation. Hopefully, the south Asian giant is well on the way to join the club of wealthy countries.
As long as we are utilizing the potential of our demographics, the country will always be running on its way to prosperity. The country will become a magnet for foreign direct investment (FII) which will further fuel the growth story. There is an adage that says money begets money. In the Indian context, it translates to growth begets more growth.
It goes without saying that foreign investments will continue to pour into India until our growth story says intact. The government must continue to make policies that are in sync with the changing technological landscape. It is high time that we invest considerably more resources in research and development(R & D). There is urgent need for it in order to stay competitive in the global context.
Stable Political System
India has a long and established tradition of democracy. The country follows a parliamentary system of government with liberal economic policies. Tradition of following democratic norms and conventions is deep and secure. In fact, participating in the democratic processes has become a key element of our national life.
For consistent economic growth, it is imperative for a country to have stable governance. Notwithstanding some issues, India has demonstrated the capacity of providing stable governance. The south Asian powerhouse has got one of the most comprehensive constitutions in the world guaranteeing every citizen fundamental and other legal rights.
Ever since the British left the country, India has been a thriving democracy. Few other commonwealth nations after attaining independence could boast of such a dynamic functioning of democratic processes. Most of them have degraded into dictatorships but India has kept it well-oiled inspiring other third world countries.
In the continuing saga of democratic election, Narendra Modi was elected to lead the government at the centre with a thumping mandate. As expected, the newly elected PM Modi started various economic reforms. The PM also announced various incentives for global companies to manufacture locally like rubber, plastic, medical oxygen plant. The country has done well under his stewardship.
Robust Economic Growth
Post-liberalization in 1991-92, India finally moved out of its mold of slow economic growth. After achieving Independence from the British, India under the leadership of Pt. Nehru adopted mixed economy. It adopted mostly Soviet model of centralized economy allowing some room for private sector as well.
The economy under this system grew at a slow rate, euphemistically called Hindu rate of growth. The economy crawled at this rate through the eighties. Then, in 1991-92, India started liberalizing its economic structure. Wide-ranging economic reforms were unleashed under the guidance of then Finance Minister Manmohan Singh.
After the reforms, the country exploded with economic activity. Latent entrepreneurship of people burst forth. Many young people started their own companies which went on to become excellent businesses generating employment for thousands of people. It was during this period that foundation for India’s IT industry was laid.
In subsequent years, India became one of the fasted growing economies. The country was able to attract investments from all over the globe. Everyone wanted to have a pie of the Indian growth story. Our famed IT firms provided services and solutions to the North American and EU companies. Earnings of the IT sector brought in valuable foreign exchange.
India still has vast untapped economic potential. Investors from all over the globe understand the importance and prospects offered by the Indian economy. The country has produced world-class expertise in pharmaceuticals, medicine, IT and in numerous other sectors.
