Asia Pacific economic growth- India's role

India is one of the key contributors to the growth of Asia-Pacific economies. The International Monetary Fund has forecasted a 7 % expansion in India's gross domestic product for FY2024-25 from previous estimates. This major expansion has been primarily influenced by domestic demand and a vibrant public investment strategy into infrastructure, education and digital technology.

Public Capital Investment Growth Catalyst

Strategic capital outlays form the foundation from which India's long-term trajectory of growth is sustained. In 2024, improvements in infrastructure increased in the form of better roads, seaports and digital infrastructure has provided much-needed breathing space to boost both indigenous and foreign investment flows into the country. As a result, this development helped sustain further growth in the Indian economy while enhancing overall resilience through the Asia-Pacific economy altogether. Public sector investments in health care, renewable energy and technology have been critical to sustaining the momentum of India even as global economic challenges remain unabated viz inflation and geopolitical tensions.

Regional and Global relations are being strengthened

The emergence of India in Asia-Pacific supply chains, especially in semiconductors and electronics is also an important development. The growth in overall demand for technology and AI-driven industries has propelled India to become one of the world's major digital economies. It drives regional development and cooperation through its burgeoning digital economy which now features as one of the fastest-growing digital economies around the world. Development in India in e-commerce, fintech, and telecommunications also paved the way for regional partnerships and better connectivity.

India has sustained the "Act East" policy by driving engagement with ASEAN nations to further intensify levels of depth with particular regard to trade and investment and also aspects of infrastructure cooperation. Countering the slow growth of significant economies, including China  which faces challenges especially in the property market while having a subdued outlook is what will make India an actuating force in that region as a stabilizing factor.

The challenge, however, is yet to come for India. Inflation while a bit more pronounced in items like rice, it remains the concern of the consumption pattern. Therefore, even if the core is steady supply chain dislocation and geopolitical tensions should continue to make short-term prices volatile. Economic resilience, however, has helped India overcome the problems by way of state-level reforms and an active fiscal policy to support the growth trend.

This means India's sound economic growth because of public investment and its technology leadership will ensure its strategic role in Asia-Pacific for years to come. Thus, as the region tackles the uncertainties of the rest of the world, Indian policies and economic strategies will go a long way toward determining the economic landscape in years to come.

Thank you.

 Regards,

Srishti Bhardwaj,

Kautilya, IBS Mumbai.