Thursday, February 29, 2024
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In a recent address at the Indo-Pacific Regional Dialogue, Finance Minister Nirmala Sitharaman conveyed positive forecasts for India’s economic growth, anticipating a leap to become the world’s third-largest economy by 2027, surpassing Japan and Germany. Sitharaman highlighted the resilience of India’s economy, projecting a growth rate of just under 7%, the highest among major economies, despite global challenges.

Emphasizing India’s role in the Indo-Pacific, Sitharaman asserted the country’s economic dynamism amid supply-chain disruptions and geopolitical tensions. The International Monetary Fund (IMF) estimates support India’s ascendancy to the world’s third-largest economy by 2027, with a GDP crossing $5 trillion. The finance minister underlined India’s ambition to transform into a developed economy by 2047.

Addressing the ‘Blue economy,’ Sitharaman outlined its contribution to approximately 4% of India’s GDP, presenting significant opportunities. India’s extensive coastline, 12 major and over 200 non-major ports, and navigable waterways position it as a key player in ocean-based trade, making it the second-largest exporter of ocean-based goods and services among developing countries in 2020, according to UNCTAD.

The Indo-Pacific region, accounting for 60% of global GDP and almost 50% of global merchandise trade, holds economic significance. Sitharaman acknowledged the geopolitical challenges in the region, emphasizing India’s commitment to an internationally accepted, rules-based order. She contrasted this with an alternative approach that seeks to disrupt this order.

India’s economic strides, coupled with a shift towards a ‘blue’ economic model, align with its aim to assume greater regional responsibilities. Share repurchase programs and strategic investments by influential figures like Ray Dalio demonstrate confidence in India’s economic trajectory. As India endeavors to become a hub in diversified supply chains across the Indo-Pacific, Sitharaman highlighted the positive response from various government sectors to new financial policies.

Key achievements include India’s rise in global shipping rankings from 44th in 2014 to 22nd in 2023. The ‘turn-around time’ of Indian ports, standing at 0.9 days outperforms established maritime centers. Initiatives like the ‘Marine Cargo Pool,’ shipping arbitration strength, and the establishment of an Indian-owned Protection and Indemnity entity aim to enhance strategic flexibility and reduce vulnerability.

On capacity building, 31 projects in nine major ports are identified for monetization under the National Monetization Pipeline. Sitharaman also highlighted the India-Middle East-Europe Connectivity Corridor, a promising connectivity project with geopolitical challenges. Despite conflicts like the Israel-Gaza conflict, the corridor aims to enhance transportation efficiency, reduce costs, and contribute to economic unity and environmental sustainability.

In conclusion, Sitharaman’s address reflects India’s optimistic economic outlook, emphasizing resilience, strategic initiatives, and global partnerships as drivers for future growth and leadership in the Indo-Pacific region.

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