India’s Gross National Product or GDP in 2022 was $3.5 trillion. India will be the fastest growing economy among the G20 countries in the next few years. But policy hurdles and reform issues could hamper foreign investment in the country, different media said recently.
According to the US-based rating agency, bureaucratic complexity can slow down the process of obtaining business licenses and setting up businesses, which prolongs the project start-up process. India’s high bureaucracy in hasty decision-making discourages foreign direct investment (FDI). Especially when India has to compete with other developing economies in the region like Indonesia and Vietnam to attract investment.
A large young and educated workforce, growing families and urbanization will increase demand for housing, cement and new cars, one of the recent Moody’s report said it. Demand for steel and cement will be strong due to increase in government infrastructure construction activities. But India’s commitment to zero carbon emissions will drive investment activity towards renewable energy.
However, demand for the manufacturing and infrastructure sectors will grow at an annual rate of 3-12 percent throughout the rest of the decade. Moody’s also predicts that India will be in a better position than China by 2030. The report also noted that despite the huge potential, investment in India’s manufacturing and infrastructure sectors risks slowing due to limited economic liberalization or slow implementation.
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