India likely to be largest economy by 2050

U.S. Assistant Secretary of State Robert O. Blake on June 17th  said the future of Indian economy seems very bright and the country is likely to become the world’s third largest economy by 2030, and the largest by 2050.

He added, “The incredible growth of India’s economy has resulted in positive spill-over effect for the U.S. between 2002-2009, U.S. goods exports to India quadrupled, growing from $4.1 billion to more than $16.4 billion in 2009.”

“U.S. services exports to India more than tripled from $3.2 billion to $9.9 billion during the period,” he said.

Last year, U.S.-India trade in goods broke a record with U.S. exports increasing by 17 per cent and U.S. imports from India rising by 40 per cent, he said during a seminar, ‘West Bengal and Beyond: U.S.-India business links and prospects” in Kolkata.

“This surge of nearly 30 per cent to a high of $48.8 billion in goods trade moved India up two notches to become our 12th largest goods trading partner. This positive trend continues, with two-way trade up 19 per cent in the first quarter of 2011, over the same period last year,” he said.

Mr. Blake said U.S. trade with India was very much a two-way exchange with mutual benefits to both the countries.

“Robust two-way trade means citizens from Kolkata to Kansas will see the benefits of our trade agreement,” he said.

Mr. Blake added that India is also a growing source of foreign direct investment into the U.S. “The total stock of FDI from India stood at almost $5.5 billion at the end of 2009. It has grown at a compound annual growth rate of 35 per cent during 2004-2009, making India the seventh fastest-growing source of investment in U.S.”

Indian companies invest heavily in many U.S. industries such as energy and IT, he said, adding that “We expect their investments to increase.”

Mr. Blake added the Indian market offers tremendous opportunity to U.S. exporters of goods and services. “India has a market of 1.2 billion of world’s consumers,” he said.

He said U.S. companies wanted to provide the goods and services needed to upgrade and build India’s railroads, airports, power plants and fibre optic cables.

He added, “India will need to invest $143 billion in healthcare, $392 billion in transportation infrastructure and $1.25 trillion in energy production by 2030, to support its rapidly expanding population.”

Quoting a McKinsey report, he said in 2030, the country would have 68 different cities housing one million plus people each.

“India will have to construct as much as 900 million square metres of commercial and residential space each year to keep pace with growing demand,” he said.

Mr. Blake added that India’s military and civil aviation modernisations, priced at around $35 billion, are already slated for some of the world’s largest purchases in the next decade.