India is quietly laying claim to economic superpower status

The rise of China has been the biggest story in the global economy in recent decades. But amid concern about its stumbling property market and global fears about inflation, the emergence of its neighbor, India, as a potential new economic superpower may be going under the radar.

You won’t find mention of it in Liz Truss’s blueprint for a “modern brilliant Britain”, but the UK has just been overtaken by India as the world’s fifth biggest economy. The nation of 1.4 billion people is on track to move into third place behind the US and China by 2030, according to economists.

And while the world became familiar with Chinese business titans such as Alibaba founder Jack Ma, the staggering wealth accumulated in recent years by Indian billionaires Gautam Adani and Mukesh Ambani has been less well publicized.

Adani, in particular, has come to represent India’s growing economic strength thanks to the rapid expansion of his Adani Group conglomerate, which covers everything from ports to airports, and solar power to the television. Having entered the global Top 10 when he became Asia’s richest person in February, he is now ranked third with a fortune of $143bn (£123bn) and is closing fast on second-placed Amazon boss Jeff Bezos.

India was for many years seen as a poor relation to China, held back by a sclerotic, sprawling state sector and labyrinthine bureaucracy. It still has enormous problems of poverty and poor infrastructure, but it is beginning to emerge as a rival to its large neighbor with the kind of economic growth figures that were once the pride of Beijing.

Gross domestic product (GDP) grew by 13.8% in the second quarter of this year as pandemic controls were lifted and manufacturing and services boomed. Although double-digit growth is unlikely to be repeated in subsequent quarters, India is still on track to expand by 7% this year as it benefits from economic liberalization in the private sector, a rapidly growing working population, and the realignment of global supply chains away from China.

“India has overtaken the UK to become the world’s fifth-largest economy,” says Shilan Shah, senior India economist at the consultancy Capital Economics, citing recently updated figures from the International Monetary Fund. “Looking ahead, India looks set to continue its march up the global rankings. In all, we think India will overtake Germany and Japan to become the third-largest economy in the world within the next decade.”

Agencies