Earlier this month, India became the fifth largest economy in the world after it overtook the UK (whose GDP declined by 0.1%) at the end of March 2022. Q1 2022 figures put India’s GDP growth at 13%. This growth is partly due to the low growth experienced in Q1 2021 (the quarter we're comparing against) as the country was still battling with the Covid-19 pandemic. Also, in per capita terms, given India’s large population (18x more than the UK’s), the UK’s GDP per capita is still more than 15x of the now-fifth largest country.
Even as fears of an economic slowdown hound many economies globally, India has maintained its high growth trajectory.
Key takeaways:
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India surpassed the UK to become the fifth largest economy in the world, mostly triggered by its technology ecosystem, large conglomerates and the government’s investment in inward-led growth.
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By increasing restrictions on importation and providing subsidies to local and foreign manufacturers, India plans to reduce its exposure to external supply chain risks by sourcing its inputs internally.
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Given the exodus of manufacturers from China, India has also begun positioning itself as a hub for manufacturers worldwide by providing production incentives to foreign companies.
The growth of the world's fifth largest economy is driven mainly by three key factors: its technology sector, large conglomerates and the government's inward-led growth.
India is known for outsourcing tech and business
