India now the fastest-growing economy in the G20
India has the fastest-growing nation among the G20 countries and is set to overtake Japan and Germany to become the world’s third-largest economy, according to former Reserve Bank of India (RBI) governor Raghuram Rajan.
Speaking in an interview on CNN, Rajan highlighted India’s unemployment problems, with the Centre for Monitoring Indian Economy (CMIE) reporting an unemployment rate of 8.1% for April 2024. This was contributing to India being the poorest of the G20 nations, he claimed, with estimates showing that only 37.6% of the working population in India is gainfully employed.
“Even if India is the fastest-growing economy in the G20, it is also the poorest country,” said Rajan.
But he did say that India is currently benefiting from a large number of young people entering the labour force. “Young people are coming into the labour force in massive quantities. If we could employ them, India would grow much faster,” he added.
The former central bank chief said: “Relative to the rich countries, we look really good. Also, we have a large population, so we are overtaking countries in terms of overall GDP. We have just overtaken the UK; India is the fifth-largest economy.”
“Soon, India will overtake stagnant Japan and Germany to become the third-largest economy. The real issue is, can Indians become rich before India grows old?” said Rajan.
The former RBI governor added: “By 2047-2050, we are going to start growing old. Are we going to be rich by then? Not at 6-6.5% growth.”
The immediate challenge for India, Rajan said, is to create enough jobs, upskill people to make them employable, and increase women’s participation in the labour force. He also highlighted the need for top-tier universities, pointing out that India does not have any in the top 100 globally.
Indian exports surge across the globe
India’s exports have surged to 115 countries out of the total 238 destinations during 2023-24, despite the global economic uncertainties, the country’s commerce ministry has announced.
“These 115 export destinations, which account for 46.5% of India’s export basket, include the US, UAE, Netherland, China, UK, Saudi Arabia, Singapore, Bangladesh, Germany and Italy,” the ministry said in a statement.
The data showed that India’s merchandise exports dipped by 3% to $437.1 billion in the last fiscal period. However, services exports rose to $341.1 billion in 2023-24 as against $325.3 billion in 2022-23. “Despite persistent global challenges, overall exports (goods and services together) hit the highest level in 2022-23. However, overall exports reached $778.2 billion in 2023-24 as compared to $776.4 billion in 2022-23, registering a marginal growth of 0.23 per cent,” the ministry said.
It added that India’s share of merchandise exports has also increased marginally, from 1.7% in 2014 to 1.82% in 2023. India’s rank among the world’s merchandise exporters too has improved from 19th to 17th during the same period.
“Further, India’s export to its top 10 destinations witnessed a 13% year-on-year increase in 2023-24,” it said. The data, however, showed that the UAE has emerged as the primary destination, with 12.71% growth in export value at $35.6 billion.
“Similarly, exports to Singapore that surged by 20.19% to $14.4 billion, to the UK (up 13.30% to $13 billion), and to China (up 8.7% to $16.7 billion) also recorded healthy growth indicating a sustained demand for Indian products.”
The data further showed that the exponential growth rates to countries like Russia (35.41%), Romania (139%),and Albania (235%) underscores the exploration of new markets. “Strengthening trade relations with these nations could unlock untapped opportunities and bolster India’s overall export competitiveness,” an official said.
“In Europe, the major countries to which Indian exporters recorded healthy growth during 2023-24 are the UK, Romania, Albania, Netherland and Greece,” it said.
