India set to be third-largest economy by 2030
India is set to become the world’s third-largest economy by 2030 as the country moves from being a ‘fringe player’ to a global powerhouse, according to Fiducian.
The country was currently the fifth-largest in the world, up from 11th, driven by factors such as the Modi government, increased direct foreign capital investment and tax cuts. Fiducian said it expected this could rise to third-largest by 2030 which would place the country behind only the US and China.
Foreign direct capital investment into manufacturing and service had risen to around US $50 billion a year. Corporate earnings growth is expected to be 24.5% in 2019 and 20% in 2020 which would put India ahead of other significant economies.
While there had been large withdrawals by foreign investors over the last 10-15 years, investors were now returning and Indian investors were also increasing their own domestic investments.
Conrad Burge, head of investments at Fiducian, said: “India today is a major global economy. Up until the arrival of [Indian Prime Minister] Narendra Modi, India was a relative fringe player on the global stage and attracted limited foreign investment that was mainly confined to companies prepared to accept the risk of waiting for long-term gains.
“Since Modi came to power, foreign direct capital investment (as distinct from share market or portfolio investment) into manufacturing and services has risen to around US $50 billion a year.”
According to FE Analytics, India’s stockmarket the BSE Sensex has risen 47.9% over three years to 30 September, 2019 while the MSCI India index has returned 37%. This compared to returns of 35% by the broader MSCI Emerging Markets index.
Performance of BSE Sensex, MSCI India and MSCI Emerging Markets indices over three years to 30 September, 2019.
AUTHOR
Laura Dew
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
