India: Asia's Next Economic Dynamo? - Forbes http://www.forbes.com/sites/edfuller/2015/09/10/india-asias-next-eco...

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Ed Fuller Contributor

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FORBES ASIA 9/10/2015 @ 4:05PM 11.877 views

Indian Prime Minister Narendra Modi gestures as he speaks during a

national convention on space technology in New Delhi on Sept. 7.
(PRAKASH SINGH/AFP/Getty Images)

Make no mistake about it: India is on the move.

After his landslide election victory in May 2014,
Prime Minister Narenda Modi told his nation
that he needed just 10 years to modernize the
country and promised that by 2022, Indias 75th
anniversary of independence, the world would
recognize that the 21st century is Indias.

Over the 15 months since taking office, Modi has

become a rock star for Indias enormous cohort
of optimistic millennials and business
community as well as for the Indian diaspora.
His appearance at Madison Square Garden in
New York last September drew a record crowd of
more than 18,500. Since taking office, hes made
26 international trips, mostly to countries in Asia,
but also to North and South America, Europe and
Australiaselling potential investors on doing
business in India. At home, hes been
streamlining the Indian bureaucracy, easing
anti-business regulations and selling his
constituents on his vision for India.

When Modi took office, Indian inflation was

running at 9% and economic growth was 5%.
Today, inflation is down to 5% and the
International Monetary Fund estimates the
Indian economy will grow 7.5% in 2015,
outpacing Chinas growth for the first time since
1999. And the countrys future prospects look
promising. The World Bank predicts India has
the potential to be the worlds 3rd largest

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economy within the next 10 years and to be one

of the worlds largest by mid-century. GDP is
expected to grow between 7.5% and 8.3% in the
coming year.

Perhaps Indias $2 trillion economy will remain

much smaller than Chinas $10 trillion behemoth
for years to come. But with todays low oil prices,
the worlds largest democracy and its huge,
skilled population have lots of room to grow.

Even now, India is the worlds 4th largest IT

start-up hub with more than 3,100 tech startups
in the past year alone. It ranks second in
worldwide food production. Its auto industry
churns outs 22 million cars a year, making it one
of the worlds largest auto manufacturers. It
boasts a $600 billion retail market and is one of
the worlds fastest growing e-commerce markets.
And earlier this year, under his Make in India
policy, Modi helped persuade Koreas giant
Samsung and Europes Airbus to open new
factories in his country.

According to Ernst & Young, Indias middle class,

about 50 million strong, or 5% of the population,
will reach 200 million five years from now. They
predict that Indias middle class growth will
accelerate quickly, reaching 475 million by 2030
and will be adding more people than China to the
global middle class just 12 years from now.

As its middle class expands, Indias outbound

tourism market is also growing. By 2020, it is
expected to exceed $40 billion. Favored
destinations for Indian travelers today are
Singapore and Thailand, followed closely by the
U.S. and China in third and fourth place,
respectively. According to Renub Researchs
Report, Indian Outbound Tourism
Market/Spending Analysis, in terms of spending
by Indian tourists, the U.S. ranked first in 2014.
In fact, Indian travelers spent more on their trip
to the U.S. than on the combined total spent on
the top nine tourism destinations.

So, its not surprising that the worlds travel

market is carefully noting the trends, including
Ireland, Spain, South Korea, Indonesia, Macau
(China) and Polandall of which recently opened
tourist offices in India.

A decade from now, India will clearly be a vastly

different country than it is today and may very
well be Asias newest shining economic star. With
roots in its rich and diverse past (dating back
more than 250,000 years), its religious and
philosophical traditions (8 major religions or
philosophies of life are actively practiced in the
country), its young peoples optimism (more than
half of the population is under 25 years of age)
and, of course, its growing middle class, India is

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well on its way to becoming a significant global

player in this century. It will be great to watch,
and perhaps participate in, its emergence on the
worlds stage.

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