As of: March 6, 2024, 9:29 p.m
By: Lars-Eric Nievelstein
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While the West is struggling with recession and a weakening economy, India's economy is growing at an excessive rate.
Experts see a “new China”.
Why is that?
New Delhi - In just a few years, the Indian economy is expected to have overtaken that of Western nations such as Germany and Japan.
India is currently growing at an astonishingly high pace and remains comparatively untouched by the crises that are still affecting the industrialized nations.
However, this is not only positive for the population.
Economic miracle in India – is the country overtaking the West?
8.4 percent – this is the amount by which Indian GDP grew in the last quarter of 2023 compared to the previous year.
As the
Tagesschau
reported, the country is currently benefiting from returnees, i.e. Indians who, for example, studied in Europe and the USA and are now applying the knowledge they have gained in their home country.
In four years, the industrialized countries organization OECD predicts, India's economy will have overtaken that of Germany or Japan.
India's Prime Minister Narendra Modi at an election rally.
While the West is struggling with recession and a weakening economy, India's economy is growing at an excessive rate.
Experts see a “new China”.
© IMAGO / Hindustan Times
It should primarily be the larger cities that drive growth, for example the metropolis of Hyderabad in southern India.
The state pumps millions of euros into research and supplies the innovation centers.
An example of this is the “T-Hub”, which offers 350 start-ups enough space for their premises and around twice as many can fit in it.
The managing director assumes that “soon” there will be more than 1,000 start-ups under the T-Hub umbrella.
Divided India – between poverty and high-tech
For this development, Prof. Dr.
Guido Cozzi, Professor of Macroeconomics at the University of St. Gallen (HSG), three main factors: young demographics, deepening relations with the West and the influx of foreign investment.
“The government's pro-business stance and investments in high-tech infrastructure” would further contribute to the trend, the economist told
Ippen.Media
.
However, he warned: "To ensure that growth translates into widespread prosperity for the entire Indian population, it is critical, however, to reduce the growing wealth distribution gap."
India is a country of contrasts - on the one hand there is extreme modernization and investment in high-tech, on the other hand there are more impoverished people living here than in any other country in the world.
GDP per capita is less than $3,000, less than a quarter of the world average.
“For comparison, China has the same population size but an income level that is in line with the global average,” said Dr.
Stefan Legge, Deputy Director of the University of St. Gallen and also Head of the Tax and Trade Policy Department, commented.
It took China four decades to go from poverty to such a level.
“No country of this size has ever developed as quickly as China.
So India still has a long way to go,” explained the economist.
“It could be – twenty years late – the second BRICS country to achieve this development.”
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Global destinations only possible with India
In any case, the Federal Republic intends to support India in this.
First of all, this is done through development aid - in 2022, the Federal Ministry for Economic Cooperation and Development (BMZ) promised India bilateral development cooperation funds amounting to 987.52 million euros.
According to the BMZ, India plays a key role in solving global development issues.
The global sustainability goals and those of the Paris Climate Agreement can only be achieved together with India as a partner.
India is at least partially affected by the global conflicts that are currently weakening the West.
Just like the German one, the Indian solar industry is currently struggling with the flood of Chinese modules that are weakening the domestic market.
And in the context of the Ukraine war, India emerged as a willing buyer of Russian oil after Western sanctions came into effect, but recently became concerned about new sanctions.