Economic growth
India is also benefiting from the worsening relations between Washington and Beijing in the economic sphere as well.
Companies are looking to shift supply chains away from China, while money managers need a place to deploy long-term funds with less risk of financial sanctions and also partly because of China’s aging population, while India, which is experiencing a democratic boom, offers young labor.
In some cases, the pivot is hard: Apple and Pegatron suppliers, for example, are building factories in Karnataka and Tamil Nadu.
JP Morgan analysts, cited by Reuters, estimate that India will manufacture one in four iPhones in two years, despite manufacturing costs being higher than in China.
Ontario Teachers’ Pension Plan, Canada’s third-largest retirement fund, closed part of its Hong Kong-based China equity investment team in April, seven months after opening an office in Mumbai.
However, India is not only attractive for its manufacturing sector. Its economy also holds out the promise of Chinese-style growth. GDP per capita was $2,379 in 2022, less than a fifth of its eastern neighbor. More than 1.2 billion people have mobile phone connections; half of which are smartphones.
Analysts and strategists at Morgan Stanley expect India to become the world’s third-largest economy and stock market before the end of the 2030s.
With information from AFP