Will India Overtake the United States in Economic Terms?

India – An Emerging Superpower

First Published: July 5, 2009 ADawnJournal.com

For as long as most of us can remember, the world’s largest economies have been the same. For economic muscle and influence, it was to the United States, the more established nations in the EU and to Japan that most attention was turned. But in the early part of the 21st Century, a lot has changed. New alliances form, and new industries flourish over time, but what few people saw coming until very recently was the arrival of a new economic force made up of some very diverse nations – the BRIC. Brazil, Russia, India and China – four nations with vast landmasses and huge populations which had nonetheless, for one reason or another, failed to flourish as global economies. As we come to the close of the century’s first decade, each is – for its own reasons – coming to bear more power in the global market.

There are those who would have sworn blind that India was the last country that would emerge as a global economic big hitter. The overwhelming impression that many first have when India comes to mind is the poverty that has dogged it for many years – and there is still a significant proportion of India’s population that lives below the “international poverty line”. There are still street children in India’s cities – but the poverty in this nation may yet be attenuated to some extent if the government of Manmohan Singh and his successors handles the continuing financial growth of this nation as they would hope to. One of the things that has previously held India back – its massive population, which some would dub overpopulation – is set to be at least partially beneficial, giving a very large workforce to a country which encourages foreign investment.

India’s huge and diverse landmass is also beneficial in economic terms, as it allows the country to spread its economy over a number of industries – agriculture is a major one, and the service industry even more so. India’s industrial sector, which includes major textile, chemical and steel industries, means that whether the world’s money is in construction, fashion or medicine, there will be a demand for what India is making and what it is exporting. Within the next decade the GDP per capita is likely to skyrocket – although how evenly this is distributed will be the focus of much attention.

Whether or not India finds a way of squaring the circle – its economic growth is attributed to its move towards a market-based economy, and may rule out a program of wealth distribution – it is still set to be one of the motors which drives global economic growth in the years to come. There is every chance that, once the final economic figures for the year are collated and calculated, India will have had growth of almost or more than 7% – making it a rare nation in a world where growth is still absent from most economies in the wake of the worst global recession for more than sixty years. Most forecasts suggest that in the middle of this century, India will overtake the United States in economic terms. Like we say, not what we might have expected a few years ago.