By Khiyarra Bajaj
Looking back on 2023, it's becoming clear that this year might be remembered as the period when India firmly established itself on the international scene. India not only secured its position as the world's most populous nation but also ascended to become the fifth largest global economy. With accomplishments ranging from a successful G20 mission to a historic moon landing, India witnessed a diverse range of achievements in the year 2023.
India’s G20 Presidency
Significant achievements and milestones were reached during India's G20 presidency in 2023. The New Delhi Declaration, issued at the G20 Summit, introduced a groundbreaking $5.9 trillion figure for green financing requirements in developing nations, emphasizing the importance of climate financing. India played a crucial role in diplomatic efforts, particularly in addressing the Russia-Ukraine crisis, showcasing the influence of emerging markets in shaping global diplomacy.
Inclusivity was a key theme, with recognition given to Turkey and the UN-brokered Istanbul Agreements for ensuring the delivery of essential goods between Russia and Ukraine. India's diplomatic endeavours were extensive, involving over 200 hours of negotiations, 300 bilateral meetings, and 15 drafts to achieve consensus.
The global impact was substantial, with decisions at the G20 Summit acknowledged to have far-reaching consequences, particularly in addressing climate change, fragility, and conflict. The summit also marked a diplomatic breakthrough, with leaders committing to refraining from using force for territorial acquisition and rejecting the use or threat of nuclear weapons.
Notable transformations included the African Union becoming a permanent member of the G20, enhancing multilateral development banks, progressing towards global crypto regulations, establishing a debt relief framework for select countries, and integrating sustainable city financing into the framework.
The unanimous agreement on all 83 paragraphs of the joint declaration exemplified India's ability to foster unity and cooperation on the global stage.
Chandrayaan 3 Mission
India celebrated a historic achievement as the Chandrayaan-3 spacecraft successfully landed on the Moon after a 41-day journey, making India the fourth nation, alongside the United States, China, and Russia (formerly the Soviet Union), to master the technology of soft lunar landing. The project, led by the Indian Space Research Organisation (ISRO), fulfilled the dreams of 1.4 billion Indians.
Prime Minister Narendra Modi congratulated the nation, highlighting that India had become the first country to reach the lunar south pole. This achievement followed an unsuccessful lunar mission in 2019 and came shortly after Russia's lunar mission ended in a crash in the same lunar region.
The successful landing was a testament to India's determination and resilience in space exploration. K. Sivan, former head of ISRO, drew confidence from the transmitted photos and expressed optimism about the mission's success. The Chandrayaan-3 mission launched six weeks earlier, utilized a unique trajectory that involved multiple Earth orbits to gain momentum before embarking on a month-long journey to the Moon. The critical phase of the mission involved a complex 15-minute descent manoeuvre, referred to as "15 minutes of terror," where the lander transitioned from a high-speed horizontal position to a vertical one. This manoeuvre was pivotal in determining the mission's success and was successfully executed.
India’s Rapid Economic Growth
India's economy is poised for continued rapid expansion in 2023-24, following two years of strong growth in 2021 and 2022, driven by robust private consumption and investment. The country has witnessed a significant surge in foreign direct investment (FDI) over the past decade, underlining its favourable long-term growth prospects. Factors such as a youthful demographic profile and rising urban household incomes contribute to India's optimistic outlook.
Recent economic indicators for India in the first half of 2023 continue to point towards a growing economy driven by domestic demand. Steel production and consumption increased, with steel production rising by 11.9% year-on-year (y/y) in the April-June quarter and steel consumption growing by 10.2% y/y. Commercial vehicle sales surged in FY2022-23, rising by 34.3% y/y, while sales of private vehicles also saw significant growth, increasing by 18.7% y/y during the same fiscal year.
The index of industrial production, which can exhibit monthly fluctuations, showed a 4.5% y/y growth in the April-June quarter, with manufacturing output increasing by 4.7% y/y in the same period. Over the full fiscal year FY2022-23 (April to March), industrial production grew by 5.2% y/y, while manufacturing output increased by 4.7% y/y.
In FY2022-23, the production of capital goods and infrastructure and construction goods showed strong growth, rising by 12.9% y/y and 12.5% y/y, respectively. However, the production of consumer durables and nondurables lagged, with consumer durables growing marginally at 0.6% y/y, and consumer nondurables growing by 0.5% y/y, as the National Statistical Office reported.
During the April-June quarter of 2023, the production of capital goods increased by 4.9% y/y, while infrastructure and construction goods saw a significant rise of 14.0% y/y. On the other hand, consumer durables experienced a decline of 2.8% y/y, while consumer nondurables showed strong growth, increasing by 6.7% y/y. Projections indicate that India's nominal GDP, measured in USD, will climb from $3.5 trillion in 2022 to $7.3 trillion by 2030.
This trajectory would establish India as the second largest economy in the Asia-Pacific region, surpassing Japan, the UK, and France by 2022 and continuing its growth. India's middle class, a rapidly expanding domestic consumer market, and a substantial industrial sector make it an attractive investment destination across various sectors, including manufacturing, infrastructure, and services.
The ongoing digital transformation in India is set to accelerate e-commerce growth, attracting global technology and e-commerce giants. By 2030, an estimated 1.1 billion Indians will have internet access, surpassing 500 million users in 2020. This digital evolution will benefit homegrown companies like Mensa Brands, Delhivery, and BigBasket, boosting their ecommerce activities.
Despite the challenges posed by the pandemic, India's FDI inflows remain robust, with tech giants like Google and Facebook investing heavily in the country. In summary, India is poised to be one of the world's fastest-growing economies, making it a crucial long-term growth market for multinational corporations across various industries, from manufacturing to services.
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