In just a few days, India will commence the world’s largest democratic election. An estimated 960 million people in a country of 1.4 billion are eligible to vote in the polls, which start on Friday and will take more than a month to complete. Narendra Modi is widely expected to clinch a rare third consecutive five-year term as prime minister.
Under his leadership, India is poised to become a 21st-century economic powerhouse, offering a real alternative to China for investors and consumer brands hunting for growth and manufacturers looking to reduce risks in their supply chains. While ties between Beijing and the West are becoming increasingly frayed, India enjoys healthy relations with most major economies and is aggressively wooing large companies to set up factories in the country.
India’s economy was worth $3.7 trillion in 2023, making it the world’s fifth largest, having jumped four spots in the rankings during Modi’s decade in office. The South Asian giant’s economy is comfortably placed to expand at an annual rate of at least 6% in the coming few years, but analysts say it should be targeting growth of 8% or more if it wants to become an economic superpower.
Sustained expansion will push India higher up the ranks of the world’s biggest economies, with some observers forecasting the country to become number three behind only the US and China by 2027. However, India could do much more to raise its gross domestic product (GDP) per person, a measure of living standards according to which it ranked a lowly 147 in 2022, according to the World Bank.
According to Guido Cozzi, professor of macroeconomics at the University of St Gallen in Switzerland, there will be “trickle down effects on per-capita GDP” as the economy grows. But he cautioned that “trickle-down economics is not guaranteed to reduce income inequality, and policies that promote inclusive growth may be necessary.”
