Finance Minister Nirmala Sitharaman recently addressed the Indo-Pacific Regional Dialogue, highlighting India’s remarkable economic trajectory amidst global challenges. She predicted that by 2027, India would surpass Japan and Germany to become the world’s third-largest economy, underlining the resilience of the Indian economy amid global uncertainties.
India’s Economic Growth and Global Standing
- Despite global headwinds, Sitharaman emphasized that India’s economic growth is estimated to be just under 7%, the highest among major economies.
- She pointed out that even conservative estimates from the IMF indicate India’s ascendancy to the position of the world’s third-largest economy by 2027, with a GDP crossing the USD 5 trillion mark.
The Indo-Pacific: Economic Dynamism Amidst Geopolitical Challenges
- Sitharaman acknowledged the Indo-Pacific as the world’s most economically dynamic region, constituting 60% of global GDP and almost 50% of global merchandise trade.
- However, she also highlighted the geopolitical challenges in the region due to great power competition.
India’s ‘Blue Economy’: A Sea of Opportunities
- Discussing India’s ‘Blue Economy,’ Sitharaman noted that it contributes approximately 4% to the GDP, representing a sea of opportunities.
- With nine states and four Union Territories along the coast, 12 major and over 200 non-major ports, and an extensive network of navigable waterways, India stands as a key player in ocean-based trade.
Maritime Sector Advancements
- Sitharaman underlined India’s enhanced global shipping ranking, rising from 44th place in 2014 to 22nd in 2023.
- The World Bank’s Logistics Performance Index report highlighted the turnaround time of Indian ports at just 0.9 days, surpassing established maritime centers like Singapore, the UAE, and the USA.
- She emphasized the government’s commitment to supporting the maritime sector through fiscal policies and financial outlays.
Strategic Initiatives: Indian-Owned P&I Entity and National Monetisation Pipeline
- To boost strategic flexibility in shipping operations, Sitharaman announced the establishment of an Indian-owned and India-based Protection and Indemnity (P&I) entity.
- Additionally, 31 projects in nine major ports have been identified for monetization under the National Monetisation Pipeline (NMP) to foster capacity building.
India-Middle East-Europe Connectivity Corridor (IMEC)
- Sitharaman termed the India-Middle East-Europe Connectivity Corridor (IMEC) as one of the most promising connectivity projects.
- Signed at the 18th G-20 Summit in New Delhi, IMEC is a multimodal economic corridor encompassing shipping, railways, roadways, electricity cables, high-speed data cables, and a hydrogen pipeline.
- The corridor aims to enhance transportation efficiency, reduce logistic costs, promote economic unity, generate employment, and contribute to a cleaner, safer world by lowering Greenhouse Gas emissions.