India’s economy is of global importance.
India has a large, young population and an open and democratic political system. India is Asia’s third-largest economy and differs in notable ways from other markets, emerging and developed alike. We see considerable untapped potential – with more than 16 per cent of the world’s population, India produces only seven per cent of the world’s output.
The drivers of growth in India are deeply structural, which suggests they are sustainable and likely to keep the economy on a reasonably strong upward path. These include urbanisation of the world’s largest rural population, gradual movement from an informal economy (currently comprising 90 per cent of India’s workers) to a formal economy, young demographic with a mean age of 27, considerable investment in infrastructure, and an ambitious program to upskill 400 million Indians. [1]
India’s relative valuations to emerging markets are attractive and forward earnings growth looks more attractive than it has been in a while. Relative policy uncertainty seems low and return correlations continue to trend lower, underscoring India’s defensive nature in a tough global environment.
India is undergoing irreversible transformation, though the progress is likely to fluctuate due to structural shifts and technological and environmental disruptions. Therefore a long term view is important for building a sustainable strategy and grasping the opportunities created by a growing economy.
Read Peter N. Varghese’s report, ‘An India Economic Strategy to 2035’ >
[1] Executive Summary & Overview – An India Economic Strategy to 2035
