In April 2023, the UN announced that India’s population had surpassed China’s, to become the largest in the world. India’s economy is also on a trajectory to surpass the U.S. in the next 50 years.
The U.S. is currently the largest global economy with China in the #2 spot. Over the 15 years prior to the pandemic, India’s real GDP growth rate averaged 8%, while the U.S. was less than 2%. Assuming India can average 8% growth over the next 20 years, and then 5% growth for the subsequent 30 years, while the U.S. holds at 2%, India’s economy would overtake the U.S. by 2073, in 50 years. A Goldman Sach’s report, “The Path to 2075, similarly forecasts India’s economy surpassing the U.S. by 2075.
Much of India’s coming economic growth is attributed to it’s growing population, as well as significant participation by women in India’s workforce. More wage earners means more consumer spending power, driving up GDP. Another contributor to India’s economic growth is its increasing manufacturing sector. The Indian government has a manufacturing growth rate goal of 12-14% annually. Their manufacturing sector GDP share is projected to reach 25% by 2025.
I’ve previously written about how the escalating US-China trade war is increasingly causing U.S. manufacturers to move manufacturing from China to other countries, including India. This is especially true with high tech and consumer electronics manufacturing.
The IMF, in April, forecasted that India is on track to surpass the economies of both Germany (currently 4th) and Japan (currently 3rd) by 2027 or 2028. Comment below if you’re seeing any U.S. lighting manufacturing shift from China to India?
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