India to be third largest importer by ’50: UK report
NEW DELHI: With a growing middle class and its rising discretionary spending, India will become the world’s third largest importer by 2050 with a share of 5.9% of global imports, right behind China and the US, a new report said, mimicking its projected ranking among world economies. At present, India is ranked eighth among largest importing nations with a 2.8% import share and is set to become the fourth largest importer by 2030.
“The US’S and the EU’S share of most import sectors is expected to decline out to 2030 as the growing purchasing power of Asia’s middle-class accounts for a rising share of global import demand. This change is particularly marked in the food, travel and digital services sectors where larger and increasingly wealthy populations in the Indo Pacific are expected to consume more discretionary goods and services,” the latest Global Trade Outlook issued by the UK’S Department of International Trade said.
The world’s centre of economic gravity has been shifting eastward for decades due to the rapid growth in Indo Pacific, causing trade patterns to shift as it moves. “Between 2019 and 2050, 56% of global growth is expected to come from the Indo Pacific, compared with a quarter from the EU and North America combined. Growth within the Indo Pacific is also expected to rebalance over time, with South Asia’s contribution (driven by India) rising,” it added.
China is a major driver of this eastward economic shift as it is expected to become the world’s largest economy by 2030. China already displaced the US in Purchasing Power Parity (PPP) terms (which account for differences in local prices) in the mid2010s. But based on market exchange rates, which are more relevant for trade, the change is expected to happen around 2030. “At that point, both countries will account for around 22% of global GDP,” the report said.
The report projected that India would leapfrog to the third place by 2050 in the ranking of world’s largest economies, just behind China and the US, with a share of 6.8% in global GDP. At present, India is ranked fifth in size of world’s economies with a share of 3.3%. India’s GDP is projected to cross Germany by 2030 to become the fourth largest economy.
“The role of emerging economies in the trading system will rise over time, consistent with their growing weight in the global economy,” the report said.
The ‘E7 group’ of the seven largest emerging economies— China, India, Brazil, Russia, Indonesia, Mexico and Turkey— are projected to equal the G7’s share of global import demand by 2050. The seven richest countries of the world—canada, France, Germany, Italy, Japan, the UK and the Us—are part of the G7 grouping.