India poised to be a superpower by 2047 but…: Top economist Martin Wolf on what could trip country’s run

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India, with its growing population and influence, is on track to become a superpower by 2047, even if it doesn’t achieve high-income status, according to Martin Wolf, chief economics commentator at the Financial Times. 

However, the path to this transformation is fraught with challenges, including a global economic slowdown and a fragile international landscape.

Wolf pointed out that for India to emulate China’s impressive economic growth from the two decades before 2012, it would need to significantly accelerate its GDP growth per head from the current 4.8% to 7.5% annually. Despite these hurdles, he believes India is likely to rise as a superpower by mid-century, leveraging its political standing, strong ties with the West, and a thriving diaspora.

The Indian government, in the lead-up to the recent Lok Sabha elections, has emphasized its vision of transforming India into an advanced economy by 2047. NITI Aayog, the central think-tank, is crafting a vision document to identify sectoral gaps and areas for improvement over the next two decades.

UN forecasts suggest that by 2050, India’s population will reach 1.67 billion, surpassing China’s 1.32 billion and dwarfing the US’s 380 million. With such a vast population, it won’t be difficult for India to match the total economic output of the US. If India’s GDP grows at a modest 5% annually until 2047, it would match the US economy at purchasing power parity (PPP).

Despite this, India is unlikely to match China’s manufacturing prowess, as its industrial sector’s share in GDP is far smaller and declining. However, India’s size and economic scale will cement its status as a great power, even if it doesn’t fully match China or the US.

Global economic headwinds, protectionism, and potential geopolitical conflicts pose risks to this trajectory. The climate crisis and uncertainties about the impact of artificial intelligence on productivity further complicate the outlook. Nonetheless, India’s vast resources and strategic position make it a key player in the “China plus one” strategy, attracting significant Foreign Direct Investment (FDI).

Exports remain crucial for India’s growth. Despite a belief that India’s large domestic market reduces the need for exports, trade has been essential for paying for imports, increasing competition, and accessing global knowledge. Currently, India’s share in world merchandise exports is just 2.2%, compared to China’s 17.6%, highlighting significant room for growth.

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