Prime Minister Narendra Modi touted India’s trade connectivity on his June visit to the US. The trip announced a slew of business deals and was part of a series of initiatives from India, including new trade deals with UAE and Australia. India is also leveraging its role as host nation for the 2023 G20 cycle.
India is fast becoming a key beneficiary of changes in global trade patterns. Given the current trends and the country’s economic reforms, India is actively being considered by companies seeking to balance the need for efficiency and lower costs with the need for supply chain resilience and global diversification.
“India’s strategy of increasing trade connectivity, greater openness, more selective and less intense protection for domestic industries is already paying dividends,” says Michael McAdoo, partner and director, Global Trade & Investment at BCG.
With a large domestic market for its goods, India hasn’t needed to trade as much as some smaller countries in Southeast Asia, for example. But it’s now positioning itself as an increasingly attractive hub for global exports through gradual economic reform and the easing of protections in the domestic market.
“India has a whole suite of policy tools that it has combined with a good demographic profile as well as a large and growing domestic market to become very attractive for inward investment,” explains McAdoo.
“India has great momentum at this point. If it can continue to work on its main challenges, including inland logistics, administrative efficiency, and improving its trade connectivity into larger developed economies, its future will keep getting brighter,” McAdoo says.
Leaders can take three actions on India:
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