India could become the world’s third-largest importer by 2050, according to a report released by the UK’s Department of International Trade. With a 5.9 per cent share of global imports by 2050, the country will become the third-largest importer, following China and the United States.
At present, India occupies the eighth spot on the list of the largest importing countries with a 2.8 per cent share. As per the Global Trade Outlook report, the country’s position on the list will jump to the fourth position by 2030 with a 3.9 per cent share.
‘ECONOMIC GRAVITY SHIFTING EASTWARDS’
The report suggests that there will be a change in import trends in fur as the US and European Union’s share of imports is expected to decline, while Asia will see its share of global imports rise.
The report noted that the change is particularly marked in the food, travel and digital services sectors where larger and increasingly wealthy populations in the Indo-Pacific region are expected to consume more discretionary goods.
It went on to say that the world’s centre of economic gravity is shifting eastward for decades and causing trade patterns to shift gradually.
“Between 2019 and 2050, 56 per cent 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,” the report noted.
One of the major reasons why the economic gravity is shifting eastward is due to China’s rapid progress. By 2030, it is expected to become the world’s largest economy, having already displaced the US in terms of Purchasing Power Parity (PPP) years ago.
However, China is expected to completely overtake the US as the world’s largest economy in 2030. “The overtake is expected to happen around 2030. At that point both countries will account for around 22% of global GDP,” the report added.
Meanwhile, India is also expected to jump to the third position by 2050 in the ranking of the world’s largest economies with a 6.8 per cent share of global GDP. At present, India is the fifth-largest economy in the world with a 3.3 per cent share.
While the report predicted India and other emerging economies to grow rapidly in future, there are several challenges that need to be tackled. The report suggested that emerging economies need to shift from imitation to innovation, tackle income inequality, high levels of debt and recover from the devastation caused by the Covid-19 pandemic.