'Indian economy to overtake UK next year'

by LAUREN CODLING

INDIA’S economy has been predicted to overtake that of Britain and France by next year, a report revealed last week.

Ranking India as the fifth largest economy in the world, the Centre for Economics and Business Research (Cebr) consultancy’s 2018 World Economic League Table released predictions for 192 countries up until 2032.

India will be number three on the list by 2032, according to the report.

The Cebr consultation also noted that while Britain looks set to rank lower than France in the next couple of years, the impact of Brexit on the UK’s economy would likely be less than anticipated, allowing it to exceed France again in 2020.

Peer and investment banker Lord Jitesh Gadhia told Eastern Eye if the UK wants to pursue opportunities with India, “then it must reach out to India more confidently and aggressively”.

“The UK will clearly need to demonstrate some ‘quick wins’ as it seeks bilateral trade deals outside the current EU multilateral framework,” Lord Gadhia explained.

“Meanwhile, the EU-India Free Trade Treaty is at an impasse where talks have been going on ever since 2007.

“I believe this opens up a golden opportunity for India to push both parties hard for ambitious trade deals across multiple fronts.”

Britain ought to identify shared interests that address the “most pressing” challenges for India and match them with its own strengths, Lord Gadhia said, adding he was hopeful the

countries could work together.

“I hope India will reach out to the UK and recognise both the necessities and opportunities opened up by its negotiated departure from the European Union,” he said. “As the saying goes: ‘A friend in need is a friend indeed’.”

Barry Gardiner, the shadow secretary for international trade and Labour MP for Brent North, said that although in the past India had a reputation for being a challenging place in terms of ease of doing business, the country has made improvements.

“People saw there was huge potential for growth in India but they found it too difficult and complex to do business. But now that India has addressed it, that is important,” Gardiner, who is also the chair of the Labour Friends of India, said.

He added: “The uprating of the credit rating in India has been important as well in the last year.

“That provides a real sense of confidence to business – seeing the sort of stability in government and the consistency of policy.”

A recent survey showed that business confidence among Asian companies rose in October-December to the highest in almost seven years due to robust consumption and global trade.

The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 94 firms, rose to 78 for the December quarter from 69 three months before.

The index reached its highest since January/March 2011.

A reading above 50 indicated a positive outlook with sentiment showing that India had improved.

On bilateral economic ties, Lord Gadhia said with the sterling reaching a 31-year low against the dollar in the current exchange rates, Indian companies should find the acquisition of UK businesses and assets “attractive”.

“Particularly, if they take a medium term strategic view which looks beyond the current uncertainty,” he said. “The UK and India should focus, above all else, on providing a stable, consistent and predictable business environment.”

Dr Raminder Ranger CBE, the founder of international marketing and distribution company Sun Mark, told Eastern Eye while Brexit brings challenges, it also gives the UK and India “enormous” opportunities to grow their economies if they collaborate.

“Britain is many years ahead of India in terms of technology and organisational skills,” Dr Ranger said. “India offers a market of 1.3 billion people with a growing economy of more than six per cent per annum.

“Their cooperation and collaboration can prove a win-win situation for both countries.”

The award-wining businessman believes India no longer wishes to be just a market for British exports – it wants UK companies to manufacture their products in India for third party export.

“This in fact, gives British companies entry into the Indian market, but also an opportunity to produce their products at lower costs due to highly-skilled labour at a fraction of the UK cost,” he explained.

“Both the former and current prime ministers attach a great deal of importance to trade with India due to the sheer size of the market.

“There is so much in common between the two countries due to the historic ties going back over two centuries – and English is widely spoken in India which helps make communication much easier than in other countries where English is considered a foreign language.”

Businessman and entrepreneur Bhanu Choudhrie told Eastern Eye he was “encouraged” by

the British government’s recent trade delegations to India, but said he would like to see “more SMEs and younger business owners on the plane with ministers”.

“The CEOs of the biggest companies have their own networks, they don’t need the promotion; the government should be pushing three or four delegations a year involving

the next generation of businessmen and women,” he said.

Choudhrie, the founder and executive director of global private equity firm C&C Alpha Group, believes the two countries can learn to focus on opening up opportunities by promoting dialogue, by which “business will follow”.

“When a 20-something speaks to a 20-something, they will do business together. They speak the same language – they just need to be brought together and that’s the role

governments can play,” he said.

“Consumer behaviour has become more sophisticated in India and the younger generation aspires to exactly the same products as they do everywhere else in the world. In that respect, there is more that unites the two economies than divides them.”

A spokesperson for the HM Treasury told Eastern Eye the UK economy is continuing to grow and at present has the lowest unemployment level in 40 years.

“We are taking a balanced approach that gets debt falling, while also investing in infrastructure, skills and research to build an economy that is fit for the future,” the spokesperson said.

Legatum Institute, an international thinktank, commented that the news of India’s predicted high rank within global economy is the “latest milestone along that country’s remarkable development path”.

“Legatum’s Prosperity Index shows that Indian Governance is 41st in the world (and one of the strongest in Asia), while the quality of its Business Environment has improved 30 places over the last five years,” the spokesperson said. “India’s demographic profile

and the opportunity for catch-up growth remain considerable.

“This is a trend we expect to run for some time yet.”

In other predictions published by Cebr, China is likely to overtake the United States as the world’s number one economy by 2032.