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While global economic shocks have slowed India's growth in the short term, its long-term growth story remains intact, noted a report by S&P Global India Research.
The report said India has strengthened its position through reforms, infrastructure development and improvements in processes, which have widened India's growth advantage compared to developed nations. The report explained that India's outlook is being shaped by both domestic strengths and global challenges. "Amid global market volatility, India's growth is resilient and remains the world's fastest-growing major economy, with its GDP forecast to continue growing 6.5 per cent in fiscal 2025-26," the report highlighted. The report also said that, "India is likely to encourage more participation in global trade, which offers increasing gains in economic growth, capital attraction, and to generate employment opportunities." However, reforms are needed across central, state, and bureaucratic levels to build a more aligned system. The findings noted that India's private credit industry is set for strong expansion because traditional banks have left a financing gap. Domestic insolvency frameworks are also helping strengthen the sector. Even though risks exist, the limited linkages between private credit and the broader financial system are expected to provide some protection. It added that India can raise its share in the global shipbuilding market over the next decade. However, reaching the target of being among the top five shipbuilding nations by 2047 will be challenging, as India holds less than one per cent share now. Atul Arya, Executive Sponsor of the India Research Chapter and Chief Energy Strategist at S&P Global Commodity Insights, said, "Frameworks that accelerate infrastructure development, promote inclusive reforms, foster private investments, diversify trade and build resilient supply chains can help India seize opportunities. This edition of India Forward shines light on multidimensional and multi-stakeholder approaches that will strengthen India's growing claim as a global economic and geopolitical powerhouse, even as the horizons continue to shift." The report highlighted that India is expected to become the second-largest market for datacenter electricity demand in the Asia-Pacific region by 2028, overtaking Japan and Australia. India's digital landscape is undergoing an unprecedented transformation, which is driving significant investments in digital infrastructure, such as datacenters, and supporting the expanding digital economy. "India is expected to become the second-largest market for datacenters' electricity demand in the Asia-Pacific region over the next two years, surpassing Japan and Australia," the report said. On the energy front, the report said that "India aims to localize its nuclear value chain and use its vast thorium reserves to enhance domestic capacity building and technology transfer." Reforms in the sector are expected around 2026-27 to make the rules more transparent and attract investment. It also said that India's electric vehicle push is gathering pace, supported by government initiatives in manufacturing and charging networks. While EV adoption is growing, biofuels and green hydrogen are also becoming important, especially for heavy transport. (ANI)
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