In a significant development, Finance Minister Nirmala Sitharaman announced on Wednesday that India is poised to surpass Japan and Germany, securing its position as the world's third-largest economy by 2027. Speaking at the Indo-Pacific Regional Dialogue, Sitharaman highlighted India's robust economic growth, projected to be just under 7 percent for the year, outpacing major global economies despite prevailing global challenges.
The Finance Minister emphasized the resilience of the Indian economy amid supply-chain disruptions and economic turbulence caused by conflicts in regions such as Ukraine, Israel, and Yemen. Sitharaman underscored India's standout performance, even amidst tensions in the South- and East China Sea, positioning the country as a beacon of economic strength.
Quoting conservative estimates from the International Monetary Fund (IMF), Sitharaman revealed that India is on track to become the world's third-largest economy by 2027, surpassing the economic giants of Japan and Germany as its GDP crosses the USD 5 trillion mark. Looking ahead, she expressed India's ambition to evolve into a developed economy by 2047.
Discussing India's 'Blue economy,' Sitharaman highlighted its contribution of approximately 4 percent to the GDP, representing a wealth of opportunities. With 9 coastal states, 4 Union Territories, 12 major ports, and over 200 non-major ports, India possesses a vast network of navigable waterways for both domestic and international trade.
According to UNCTAD, India emerged as the second-largest exporter of ocean-based goods and services among developing countries in 2020. Sitharaman stressed the strategic importance of the Indo-Pacific region, constituting 60 percent of global GDP and nearly half of global merchandise trade.
Addressing geopolitical challenges, Sitharaman emphasized India's commitment to an internationally accepted, consensually derived rules-based order, distinguishing it from competing perspectives that seek to replace this order with an exclusive state-generated international framework.
As India advances its economic growth, Sitharaman highlighted the shift from a 'brown' to a 'blue' economic model. She asserted that this transition requires India to shoulder greater regional responsibilities, a commitment the country is actively pursuing.
Sitharaman also highlighted India's improved global standing, citing indices that recognize the country as well-governed and innovative, with a business-friendly environment. She outlined the government's dedication to supporting the maritime sector, positioning India as a hub in new supply chains across the Indo-Pacific and worldwide.
On the shipping front, India has achieved a rise in global rankings from 44th place in 2014 to the 22nd rank in 2023. The 'turn-around time' of Indian ports is now an impressive 0.9 days, surpassing established maritime centers like Singapore, the UAE, Germany, the USA, Australia, Russia, and South Africa.
Addressing challenges posed by the Covid-19 pandemic, Sitharaman highlighted initiatives such as the creation of a 'Marine Cargo Pool' and efforts to strengthen India's position in shipping arbitration. To enhance strategic flexibility, a fully-owned Indian Protection and Indemnity (P&I) entity is being established to provide protection to coastal and inland shipping.
In terms of capacity building, Sitharaman revealed 31 projects identified under the National Monetisation Pipeline, with a total estimated CAPEX of 14,483 crore rupees for FY 2022-25. She also highlighted the India-Middle East-Europe Connectivity Corridor (IMEC) as a promising project that aims to enhance transportation efficiency, reduce logistic costs, and foster economic unity among participating states.
However, Sitharaman acknowledged geopolitical challenges associated with the IMEC, citing the ongoing conflict in Israel and Gaza as a concern. The corridor, signed at the 18th G-20 Summit, is envisioned as a multimodal economic network fostering connectivity and trade integration across South Asia, West Asia, Europe, and the Middle East.
With PTI Inputs
