GDP competition with Japan: The world media also discusses the necessity to emulate Tamil Nadu’s industrial growth in the heartland states and the Nepal PM’s decision to make his first foreign visit to China rather than India.
GDP competition with Japan, stock market revolution. The Indian economy is receiving international attention, although cautiously.
The Awadh Times– New Delhi: worldwide media has been analyzing the potential worldwide repercussions of a Trump administration since the U.S. elections, which has led to a new examination of the world economy, including India.
The Economist claims that India is experiencing a “shocking stock market revolution.” According to the article, which refers to the Indian stock market as the biggest “experiment in participatory capitalism” ever, entry barriers have decreased to the point where one in five households now own shares, and approximately 100 million people who were just above the poverty line are now capitalists thanks to their ownership of shares in publicly traded companies.
The digital revolution has also brought about a change in investing, which has been aided by UPI and electronic brokers. According to the story, less than half of household assets are now kept in bank accounts. Mutual funds appear to be the most popular option; during the last eight years, the number of SIP accounts has grown from 10 million to 99 million, and demat accounts have also climbed.
Derivatives trading is the most severe sign of investment craze; according to the article, India currently makes up 80% of worldwide turnover. It also highlights how a modest initial public offering (IPO) by a tiny bike dealership was 400 times oversubscribed.
However, the fact that the majority are novice investors should raise red flags since it jeopardizes financial stability.
According to The Economist, “Indian regulators are becoming more uneasy.” There are several reasons to celebrate India’s capital market’s dynamism and growing inclusivity. However, a potential bubble may teach hard lessons about valuation—at the expense of the new, little investors.
GDP competition with Japan: India’s GDP is expected to surpass Japan’s.
According to the Japan Times, the IMF estimates that India’s GDP might surpass Japan’s as early as 2025. According to S&P Global Rankings, the change might occur in 2030. The causes for this include a weak yen and economic stagnation.
Prior to China’s 2010 overtake, Japan’s economy was the second biggest in the world. Earlier this year, Germany also overtook it, dropping it to fourth position. India and Japan are in a close race; in 2023, India’s GDP was $3.55 trillion, while Japan’s was $4.22 trillion.
According to The Japan Times, “India has been steadily rising since around 2000, while Japan has been in and out of recession and fighting deflation for decades.”
However, Trump’s presidency will cause significant disruptions to economic development and trade, and the effects on Japan and India are still unknown. In addition, Japan now has a possibly less resolute minority administration and a hawkish central bank, which means higher interest rates.
According to the article, “Economists note that the rise of India is very much a matter of scale: nominal rise of GDP should be kept in perspective.” “Any economic issues in India could also have a significant impact on its currency or growth and alter the timeline.”
GDP competition with Japan: The manufacturing boom in Tamil Nadu
Former top economic adviser Arvind Subramaniam examines Tamil Nadu’s industrial development in an essay published in the Financial Times. Companies like Foxconn, Ford, Nike, Feng Tay, and Cisco have established offices there. The article explains how Tamil Nadu broke the code and provides lessons for the rest of India.
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Manufacturing multinationals were able to fulfill their diversity, equality, and inclusion (DEI) obligations by using the state’s ability to access highly educated labor pools, particularly women. Additionally, it has given the impression that the state is a “relatively easy place to do business” since, in addition to providing investors with substantial incentives, its reactive policy structure aims to reduce risk to them.
“This Tamil Nadu experience must be replicated in the poorer, more populous heartland states of Uttar Pradesh, Bihar, Rajasthan, and Madhya Pradesh with their cheaper labor pools if India is to develop its manufacturing sector,” adds Subramaniam. Indeed, India’s geopolitical window will not last forever, and there will be significant governance issues. However, the purpose of the model is emulation.
GDP competition with Japan: India and Nepal’s “Monroe Doctrine”
According to Global Times, Nepal’s prime minister, K.P. Sharma Oli, made his first bilateral trip outside since assuming office, opting to visit China rather than India.
It quotes a Chinese analyst as stating, “Instead of criticizing the decisions of a sovereign nation concerning its diplomatic engagements, this so-called ‘break from tradition’ should prompt India to reflect on why China is increasingly welcomed among South Asian countries.”
The Kathmandu Post stated that the visit will probably concentrate on the execution of previous agreements and accords, even if Chinese authorities have not officially acknowledged it. Indian media, according to Global Times, said that Oli’s visit was a “symptom of strain” in India-Nepal ties before crossing off a number of issues, including India’s opposition to Chinese investments in Nepal and disputes over more aircraft routes in recently constructed Nepali airports.
India’s overemphasis on Nepal’s state visit decisions, notwithstanding the country’s independence, is not just a reflection of its disrespect for Nepal’s sovereignty.
The article cites Qian Feng, head of the research department of the National Strategy Institute at Tsinghua University, as stating, “but also demonstrates India’s Monroe Doctrine mentality of treating South Asian countries as its backyard.”
Named for President James Monroe of the 19th century, who first outlined it, the Monroe Doctrine is a fundamental cornerstone of US foreign strategy. It said that the US would consider any intervention in the affairs of any sovereign state in the Americas by a European power to be unfriendly, in an effort to create a sphere of influence in the Western Hemisphere.
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