Jakarta, CNBC Indonesia – India is expected to become a new economic powerhouse in Asia and the world. In addition to its large economic scale, Bollywood Country will also become the largest lender in the region.
In the report Financial TimesIndia has stepped up its efforts to extend credit worth tens of billions of dollars to neighboring countries, including beneficiaries of China’s Belt and Road (BRI) grant. Including those currently in financial trouble such as Sri Lanka and the Maldives.
In the Maldives, India is funding the $500 million (Rp 7.7 trillion) ‘Male Raya Connectivity Project’. Bollywood has also built a 7 km long bridge which connects the capital with several other islands in the vicinity.
“Prime Minister (PM) Narendra Modi’s government is starting to develop a sense that India needs to do something,” said C Raja Mohan, a senior researcher at the Asian Institute of Public Policy in Delhi, quoted on Friday (2/ 12/2022) .
“The geopolitical dispute with China is much livelier,” he added.
India’s role as a creditor has grown rapidly. Loans through India’s Development Partnership administration have nearly tripled in value since Modi took office in 2014 compared to the previous eight-year period to a total of $32.5 billion.
“India’s cumulative development aid since independence in 1947 has nearly doubled, from $55 billion to $107 billion since 2014,” according to the government-backed RIS think tank.
While still below the Chinese scale, India has provided more than 300 credit lines for some 600 projects, ranging from a cement plant in Djibouti to a bridge in the Maldives. India has also funded everything from training courses to the restoration of overseas cultural sites such as mosques and temples.
“India doesn’t have the capacity to expand as far as BRI. But it is doing something, in its scope, where it offers competition to China,” Mohan added.
Japanese overtaking
Meanwhile, India itself is expected to become the world’s third largest economic power by 2030. After the two superpowers, namely the United States (US) and China.
The projections were released by S&P Global and Morgan Stanley. S&P projects gross domestic product (GDP) growth to average 6.3% through 2030, while Morgan Stanley forecasts India’s GDP is expected to more than double by 2031.
Therefore, India will overtake countries with other major economies, such as Japan, Germany and the UK. India itself has experienced year-on-year GDP growth (Year after year/y/y) of 6.3% in the third quarter of 2022, slightly higher than the Reuters survey estimate of 6.2%.
“India has the conditions for an economic boom driven by offshoring, investment in manufacturing, energy transition and a developed digital infrastructure of the country,” Morgan Stanley analysts led by Ridham Desai and Girish Acchipalia wrote in the report, citing CNBC International.
“These drivers will make the economy and the stock market [India] the third largest in the world before the end of the decade,” he added.
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