Economic impact of Make in India: After the pandemic India growth rate was 8%. It’s Nifty 50 and S&P 500 reached overall growing rates of 7% to 8% until recently the stock market fallen down over the last few months. The growth of Trading sector or commodities has slowed down this is making investors to leave from the market slowly. The reason behind the low rate which is fallen down to 6% according to Ruchir Sharma This can happen any country because of the typical pattern the result is investors started to look elsewhere.
Indian equities saw almost $21 billion of foreign inflows in 2023, but plummeted to just $124 million in 2024 and investors withdrawn over $12 billion so far at this year. India low growth rate has caused by some mistake or typical pattern theories. Ruchir Sharma is the chairman of Rockefeller Capital Management and author recently book of ‘The Rise and Fall of Nation’ said that India is the biggest stock market share and most expensive equity market in the world but since few months we may reached to the point of overexcitement that may cause disappointment.
Raghuram Rajan- Former Reserve Bank of India Governor said “The question is 6% is enough for India, the answer we all know that this is not enough”, we do want to grow rich before we grow old. He says the big problem for india is lack of jobs. We are not making a full use of capacity even at 6% of growth.
Ruchir Sharma openly discusses how foreign investment flows into India while states engage in competitive federalism. Many chief ministers have the power to do a lot of things on the ground rather than getting caught up in regulations and the challenging business environment in India.
Potential Conflicts
If India is moving to loosen restrictions on foreign investment eventually but as it is a slow progress maybe because focusing on wrong sectors. Manufacturing own goods is what every country wants nobody wants import goods from another country. This leads to the recent conflict between U.S and India for competitive investment, both countries want global companies to manufacture within their borders, potentially creating friction in attracting foreign direct investment (FDI)
High tariff and Trade restrictions
If the U.S. pushes for bringing manufacturing back home, Indian exports to the U.S. could be impacted. As we have seen India goods exporting is larger than the U.S. These policies encourage reducing reliance on imports, which can lead to higher tariffs and trade restrictions.
can Co-development resist the Conflict?
India has been a giant in exporting services so there it should focus on to collaborate in sectors like defense, semiconductors, and renewable energy, where both countries benefit from co-development
Recent conflicts with China where U.S president imposes 10% tariff on China Goods has led to geopolitical tensions rising, the U.S. seeks to reduce dependence on China. India can position itself as an alternative manufacturing hub under the “China+1” strategy.
Joint Ventures in Manufacturing is important for both the countries –
India could produce goods for American companies under “Make in India for the World,” complementing “America First” while keeping costs competitive. They can complement with each other than contradict. Every country has specialities to settle by working so that there way to trade more for example U.S has oil and natural gas manufacturing, India can buy more and U.S. remains a major investor in India’s IT and tech sectors.
