 The Emerging Power of Emerging Markets” at the 11th International Economic Forum at St. Petersburg highlighted the change in the global trade that has come about as a result of the rise of the emerging markets and pointed out India as an example of the growing clout of these countries in global economy. “What better example to cite the growing clout of emerging economies than India, which has recorded the fastest GDP growth in 18 years, with the economy growing 9.4 per cent in 2006-07. While India continues to alter the coordinates of global trade, the country itself has seen robust growth in manufacturing with the sector growing 12.3 per cent in 2006-07 as compared to 9.1 per cent in the previous year... Very few countries in the world match these growth rates”, he said.
The Minister recorded the strides India has made in attracting foreign direct investment (FDI) and said that an estimated growth rate of 9% over the next five years starting 2007-08 would need an investment rate of 35.1% of GDP. He also informed about the huge investment potential in the upcoming knowledge process outsourcing (KPO) sector. “We are likely to capture around 15% of the over US $ 54 billion KPO industry worldwide by 2010”, he said.
Shri Nath also emphasised the opportunities presented by India’s farm and food processing sector which has been identified as a priority area and also spoke of India’s strength in the gems & jewellery and automobile and auto-components sector. Further, quoting a McKinsey study, he informed that the Indian pharmaceutical industry is projected to grow to US $ 25 billion by 2010.
On the issue of the retail revolution, the Minister informed that organised retailing in India is expected to grow at the rate of 37% in 2007 and 42% in 2008. This is also offering opportunities in real estate sector, he stated. Shri Kamal Nath emphasised the need for “inclusive development” and said the biggest challenge before the emerging economies is to ensure that growth and development are more evenly spread.
Some of the facts regarding the emerging markets highlighted by Shri Kamal Nath during his address are: |
- The share of emerging markets in global merchandise exports has more than doubled between 1970 and 2005. From 12.3% share of global exports, emerging markets now account for 28.8% of global exports. The Asian emerging markets raced from a mere 5.8% share of global exports in 1970 to 19.6% in 2005.
- The share of emerging markets in global merchandise imports has doubled between 1970 and 2005. From 13.6% share of global imports, emerging markets now account for 25.6% of global imports. The Asian emerging markets have seen their share go up from a mere 6.6% share of global imports in 1970 to 17.3% in 2005.
- In 1970, the emerging market economies accounted for 13.5% of the global FDI inflows, this proportion increased to 31.7% in 2005. Particularly notable is the performance of the Asian emerging economies whose share in global FDI inflows quadrupled from 4.1% in 1970 to 18.4% in 2005.
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