After last year’s push from China to champion itself as the saviour of globalisation and lure international investors, this year it was the turn of Prime Minister Narendra Modi to slam protectionism and showcase a ‘new India’ to global chief executives gathered in Davos.
“Forces of protectionism are raising their heads against globalisation, their intention is not only to avoid globalisation themselves but they also want to reverse its natural flow,” he told business and political leaders in the Swiss Alpine resort.
Globalisation is accepting change and shape it
“The result of all this is that we get to witness new types of tariff and non-tariff barriers. Bilateral and multilateral trade agreements and negotiations have come to a kind of standstill. Most nations have seen a decrease in cross-border financial investment further, growth in the global supply chain has also stopped,” he added, stressing the need to accept change and formulate agile and flexible policies in line with the changing times.
Modi’s trip is the first visit by an Indian prime minister to Davos in more than two decades and he made repeated references to 1997, when Deve Gowda joined the Forum, Harry Potter was an unheard name, tweeting was done only by birds and Amazon referred to forests.
He arrived in Davos with the largest-ever Indian delegation, comprising six ministers and more than 100 CEOs, including Finance Minister Arun Jaitley, and Commerce and Industry Minister Suresh Prabhu.
Modi was not shy to underline the difference from the other big player, China. “One-sixth of the global community lives in India and is a very diverse society that has a common vision; for a shared future. This is our real strength. We are trying to harness it and strengthen it further,” he noted, pointing at India as the world’s largest democracy and the fastest-growing major economy.
Overtaking G7 countries and China
India’s economy has been predicted to overtake that of Britain and France by next year, becoming the fifth largest economy in the world, according to a report by the Centre for Economics and Business Research.
India is now the world’s fastest-growing large economy and probably will be for years, if not decades, to come. The World Economic Forum has underlined that India will also outgrow China in 2018, if it manages to invest in the next generation value chain.
The IMF forecasts growth of 7.4% for India in 2018, with international banks returning a range of predictions running from a low of 7% (Standard Chartered and HSBC) to a high of 7.5% (Nomura and HSBC). China’s maturing economy is unlikely ever again to match such high growth numbers.
Once poverty-stricken and reliant on international aid, India opened up its economy in the early 1990s and has since seen steady, sometimes remarkable, economic growth. Today, by most measures, India is one of the world’s largest and fastest-growing economies.
“India is an investment in future,” he launched, highlighting the vibrant and youthful society, the large number of Tech manpower and the third largest consumer market in the world by 2025.
The offensive was clearly visible all over Davos. Posters showing Modi unrolling the red carpet or making India’s business case towered over the congress centre. Hundreds of Indian businessmen were there to craft the narrative of a new India.
Invest India and the department of industrial policy and promotion (DIPP) is shaping the ‘New India’ campaign hat highlights the massive opportunities through a large market, an economy estimated to touch $5 trillion and a middle class of 550 million in 2025.
The government wants to pitch India as an attractive investment destination, with strong economic fundamentals and a regime pushing reforms such as GST and improving governance through a “technology-driven transparent” approach.
“If you want wealth with wellness, work in India. If you want peace and prosperity, live in India. If you want health with whole life, be in India. And our promise is that your agenda will be part of our destiny,” he ended.
But if India is really serious about boosting its attractiveness, it should start by delivering on a trade agreement already underway.
India and the EU have been negotiating a bilateral free trade and investment agreement (BTIA) since June 2007 and have missed several deadlines to conclude the talks due to unresolved issues mostly related to market access.
The 2017 EU-India Summit, some observers underline, stands as a watershed moment in the relationship’s timeline having transformed EU-India ties into a veritable strategic partnership by securing it firmly onto two new forward-looking pillars – a platform for climate and energy cooperation and a partnership on sustainable urbanisation.
The summit also registered a pledge by the European Investment Bank to invest a further €800m in solar projects across India and the conclusion of a mobility agreement for young scientists and researchers.