India's Emergence as a Potential Alternative to China in Emerging Markets
India This Decade
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| Launched: Oct 16, 2023 | |
| indiathisdecade@gmail.com | Season: 1 Episode: 8 |
India's rise as a potential alternative to China within the emerging markets complex has recently caught the attention of many. This can be attributed to several factors that are driving India's remarkable economic growth story. Firstly, with a population of nearly 1.5 billion people according to United Nations estimates, India has become the most populous country in the world, surpassing China for the first time since 1950. Although poverty remains a concern, substantial progress has been made, with the percentage of people living in multidimensional poverty decreasing from 55% in 2005 to 16.4% in 2021. Another significant factor is India's workforce. Over the past two decades, India's population growth has outpaced China's, experiencing a remarkable 36% increase.
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India's rise as a potential alternative to China within the emerging markets complex has recently caught the attention of many. This can be attributed to several factors that are driving India's remarkable economic growth story. Firstly, with a population of nearly 1.5 billion people according to United Nations estimates, India has become the most populous country in the world, surpassing China for the first time since 1950. Although poverty remains a concern, substantial progress has been made, with the percentage of people living in multidimensional poverty decreasing from 55% in 2005 to 16.4% in 2021. Another significant factor is India's workforce. Over the past two decades, India's population growth has outpaced China's, experiencing a remarkable 36% increase.
India's rise as a potential alternative to China within the emerging markets complex has recently caught the attention of many. This can be attributed to several factors that are driving India's remarkable economic growth story. Firstly, with a population of nearly 1.5 billion people according to United Nations estimates, India has become the most populous country in the world, surpassing China for the first time since 1950. Although poverty remains a concern, substantial progress has been made, with the percentage of people living in multidimensional poverty decreasing from 55% in 2005 to 16.4% in 2021. Another significant factor is India's workforce. Over the past two decades, India's population growth has outpaced China's, experiencing a remarkable 36% increase. Additionally, more than 40% of India's population is under the age of 25, resulting in a median age of 28, almost a decade younger than China's. This youthful and sustainable working-age population, coupled with rising real wages, lays a solid foundation for future economic growth. Investors have taken notice of India's immense growth potential, leading to steady inflows into Indian equities. The MSCI India Index has recently broken out from a two-year consolidation range, indicating a bullish momentum and suggesting further upside potential. India has been outperforming China since December 2020, and this trend is expected to continue. Global capital flows are shifting away from China in favor of other emerging Asian markets, with India at the forefront. This shift is driven by concerns over China's business environment, economic recovery, and politics.
India's focus on infrastructure development is another crucial driver of growth. The country has allocated approximately $120 billion for infrastructure spending in the current fiscal year, representing a notable 37% increase from the previous year. This investment is part of a broader infrastructure pipeline amounting to nearly $2 trillion from 2019 to 2025. Progress has been made in enhancing railways, roads, and electrified rail networks, which support economic development and connectivity.
