17 June 2024

India’s Economic Growth Outshines China as Western Investments Shift

2 min read

India has demonstrated a robust economic growth performance, emerging as a preferred investment destination for Western companies, according to a United Nations expert. The World Economic Situation and Prospects 2024 report has upgraded India’s growth projections for 2024, with the economy now expected to expand by nearly seven per cent this year.

The mid-year update of the World Economic Situation and Prospects 2024, released on Thursday, highlights that India is reaping the benefits of increased investments from Western sources. As foreign investments in China dwindle, more Western investments are being redirected to India. This shift has positioned India as a viable alternative for investors looking to diversify away from China.

The report forecasts India’s economy to grow by 6.9 per cent in 2024 and 6.6 per cent in 2025. This growth is primarily driven by strong public investment and resilient private consumption. The revised growth projection for 2024 marks an increase from the 6.2 per cent GDP forecast made by the UN in January this year.

Rashid, an expert at the UN, emphasized the simplicity of the factors driving India’s economic outlook. “Indian inflation has significantly decreased, easing fiscal constraints compared to other countries. There is support from both monetary and fiscal policies,” he said. “The growth momentum that started last year is continuing, and India’s exports have been notably strong. Given these factors, the modest upward revision in growth projections is quite reasonable.”

India’s economic landscape has become increasingly attractive to foreign investors, with the country’s stable economic policies and growth potential standing out in the current global economic climate. The country’s focus on enhancing infrastructure and fostering a business-friendly environment has further bolstered investor confidence.

As Western companies continue to seek alternatives to China, India’s strategic position and economic reforms are likely to attract sustained foreign investments. The shift in investment patterns underscores India’s growing prominence on the global economic stage and its potential to drive significant economic progress in the coming years.

The World Economic Situation and Prospects report serves as a testament to India’s economic resilience and its capacity to adapt to shifting global investment trends. With favorable economic conditions and ongoing reforms, India is poised to maintain its upward trajectory and reinforce its position as a key player in the global economy.