Moody's and Nomura changed their forecast on India's growth. | Can this big step of Make in India become a big problem for China?

 

Moody's and Nomura changed their forecast on India's growth!

 

India's GDP figures came on Thursday. As expected, India's growth figures were strong and with these figures, India has left behind the world's leading economies like America and China in terms of growth. Now the whole world is accepting the iron of India's economic power. Strong figures have come for the first quarter of the financial year 2023-24.

 

The effect of this is that big agencies which used to take India slightly earlier, have also started believing that India has grown at the fastest speed on the way to become the economic engine of the world. The government's strong economic measures have brought these agencies back on track. 

Its effect is also visible that after the arrival of tremendous figures of quarterly growth, global agencies have also started giving high estimates regarding the future growth of India. Global rating agency Moody's on Friday increased India's GDP growth forecast. Moody's has predicted India's growth to be 6.7% in 2023. 

Earlier Moody's had expected it to remain at 5.5%. Nomura and Deutsche Bank have also increased India's growth forecast for the current fiscal. Nomura has raised India's growth forecast by 40 basis points to 5.9%, while the Deutsche bank has increased it by 20 basis points to 6.2%. 

In fact, in the April to June 2023 quarter, India's GDP growth reached its highest level in four quarters. India's growth has been 7.8% in the June quarter. However, the Reserve Bank India had kept the country's growth forecast at eight percent for the first quarter. Rating agency ICRA had estimated that the country's growth would be 8.5%. 

A year ago, the country's growth from April to June 2022 was 13.1%, whereas from January to March this year the growth figure was 6.1%. Rating agency Moody's, however, has slightly cut India's growth forecast for the calendar year 2024. Moody's has said that India's growth will be 6.1% in 2024. Earlier it was estimated to be 6.5 percent growth for 2024. 

Although there is no fundamental problem in the country's economy due to the cut in the growth forecast, Moody's has said that due to the high base in the first quarter, the growth figure may be slightly lower in 2024. Moody's has said in its report that the strong performance of the services sector and strong capex in the first quarter have kept GDP growth figures high. 

Even though big economies are finding it difficult to move forward at the global level, India is growing fast away from all these concerns. Although inflation is becoming the biggest obstacle in the way of the government and overcoming it will be the biggest challenge of the government in the coming times, for the time being, the government can celebrate the high growth figures.

 

 

Can this big step of Make in India become a big problem for China?

 

Make in India campaign has got a big victory and it can become a big trouble for China.  Because now Indian-made laptops, tablets, and computers will be sold in India. You might remember that recently the government banned the import of laptops and computers in India.

 

This means, that if they want to work in India, from foreign companies that manufacture laptops and computers to companies that import goods from outside countries and sell goods in India, they will have to make goods in India, bringing them from outside will not work. These companies must have got a big blow due to this decision of the government. 

However, the government also took some steps to provide relief to the company. To encourage the manufacturing of these things in the country, the government launched a $ 2 billion manufacturing incentive scheme, which is about 17,000 crores, to bring in huge investment. And the amazing thing is that now the effect of this decision of the government has started becoming visible. 

According to the information, the government has so far received 32 applications for the PLI scheme related to IT hardware, to which companies like Dell, Acer, Lenovo, and Netware have applied. Under this scheme, the government will give incentives of 4 to 7%  to the companies. This means that these companies will be able to produce products like laptops, tablets, and servers under this scheme in India itself.

 

That is, just as today smartphones have started being exported from India to foreign countries, a similar thing will happen with laptops and tablets as well. You may get to see it in the coming times. If this happens, India's dominance over the world's electronic supply chain will start increasing. Besides, it is also expected to bring investment of ₹2,430 crore in the country.

 

Under this scheme, incremental production can be up to ₹3,35,000 crore and it is estimated that about 75,000 people will get direct employment. You may see the impact of changes in the IT hardware sector by 2026. India's target on IT hardware is to achieve annual production of $300 billion by 2026.

 

Obviously, with this, we will be able to export. But if we look at today's situation, from April to June, imports have increased by 6.25% year-on-year to reach 19.7 billion dollars. It means we are not exporting. Importing too much. At present, the share of electronics imports in the country's total merchandise imports is between 7 to 10%.

 

But if India has to become an exporter of all these things then it is necessary to take some big steps. Only then will we be able to achieve our target shortly? Let us tell you that today Dell, Acer, Samsung, LG Electronics, Apple Inc., Lenovo, and HP are among those companies that sell laptops on a large scale in the Indian market. 

A large part of these is imported into India from countries like China, which has now been stopped. Because of this companies like Dell, Acer, Lenovo, and Netware have joined India. But Apple Inc., one of the world's largest companies in this sector, has not yet submitted a proposal under the PLI scheme in India for laptops and tablets. 

Currently, the deadline to apply for this scheme has ended on August 30. The government may extend its deadline once again and then Apple may also become a part of this scheme. Overall, on one hand, the government's scheme can be beneficial for the companies, and it can be beneficial for the country.

On the other hand, all the countries like China that want to attract big companies in this sector or are doing so, their For this, India has presented a big challenge. If IT hardware products like smartphones are also shifted to India, then this matter can create an economic problem for China in the future.