India’s growing stature in the global economy

New Delhi, India’s importance in the global economy has increased with Moody’s improving its GDP forecast and India’s inclusion in the Bloomberg Bond Index. Earlier this week, global rating agency Moody’s raised India’s GDP growth forecast for current FY24 to 6.8 percent, compared to the earlier estimate of 6.1 percent.

Bloomberg on Tuesday announced the inclusion of India FAR bonds in the Bloomberg Emerging Markets (EM) Local Currency Government Index. Michael R Bloomberg, Founder of Bloomberg LP, said, “This is an important marker in the evolution of India’s financial markets and a reflection of India’s growing importance in the global economy.

He said, “India’s continued emergence as a global financial center promises to be one of the most significant economic developments of this decade and Bloomberg is committed to strengthening this by attracting more investors to India. Key Investments of Geojit Financial Services Strategist VK Vijayakumar said Bloomberg’s decision to include Indian bonds in the Emerging Markets Index follows JPMorgan’s decision to include India in its Emerging Markets Bond Index.

India’s inclusion in the Bloomberg Bond Index is expected to attract investments of more than $5 billion. Global financial houses are talking about India’s strong growth. Taimur Baig, MD and chief economist, DBS Group Research, and Nathan Chow, senior economist, DBS Group Research, said, “India is in a good place in many ways. There are many motivating factors for global investors to view India favourably, from geo-strategy to demographics.

Furthermore, domestic infrastructure, both physical and electronic, has significantly improved, social welfare has expanded, consumer confidence has increased and asset markets have boomed. The note said the external balance, long vulnerable to volatile investment flows and global energy shocks, is now beginning to improve, as the services surplus offsets most of the trade deficit.

Brokerage firm Prabhudas Lilladher said the Indian economy witnessed a strong growth of 8.4 per cent in Q3FY24 as against 8.4 per cent in Q3FY23 due to strong industrial performance led by the government’s ‘Make in India’ campaign and stimulus on infrastructure creation. In the third quarter it was 4.3 percent. He said, “The government estimates that India’s growth rate in FY24 will be 7.6 percent, whereas in the previous year it was 7 percent. We believe that the Indian economy will remain the fastest growing economy globally due to pro-growth policies, improving domestic demand conditions, government spending and capacity utilization of private firms.