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India – new workbench of the world?

1 month ago
thedialog
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Picture Source: The economic times

Introduction :  With the upcoming election on the 19th of April 2024 –  Prime Minister Narendra Modi wants to be re-confirmed in office. For ten years he has been pursuing an increasingly authoritarian course. The West, on the other hand, wants to build the country as a geopolitical and economic partner. 

Article : Bangalore is the capital city of the southern Indian state of Karnataka. The third largest city in the subcontinent, with a population of 8.5 Millioenen, is considered the center of the Indian Silicon Valley.

On the 12th December 2023, the Karnataka government made an announcement that hit like a bomb: The Taiwanese company Foxconn, the main producer of Apple’s iPhone, wants to increase investment in its manufacturing facilities in Bangalore from 1 billion dollars to 2.7 billion dollars.1

Undoubtedly, the Indian government is a major beneficiary of the current trend towards reducing international economic risks. This strategy, known as de-risks, is intended to reduce the dependence of international companies on China at the economic level and slow down its increase in power at the geopolitical level.

Modi promotes “Make in India”

As a contemporary symbol of India’s flight, many in the country view the successful moon flight of an Indian rocket in August 2023. There is also great international enthusiasm in economic and government circles as in the media editors about India’s rise to the “new workbench of the world”. However, the actual situation of the country suggests a more cautious assessment.

In 2023, India, with its almost 1.43 billion people, will be the most populous country on the earth and also has the largest working population: these are currently 970 million people, and by 2030 it is expected to be more than 1 billion. According to UN forecasts, this increase will continue until at least 2050.

India is also a young country: 40 percent of the inhabitants are under 25 years old, the median age is 28 years, compared to that in China, 39 years (figures for 2023). The difference to China will continue to grow after UN calculations by 2050.4 Currently, more than 10 million young people are pushing into the labour market every year, which is a huge plus in the eyes of foreign investors – at least at first glance.

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