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India has officially become one of the world’s largest economies, claiming tenth place in the league table of top global financial players, the World Bank has declared. Massive industrial growth combined with increasing investment from Western companies has elevated the Asian giant from 12th place into tenth, just behind Spain, Canada and China. It is now worth $692bn (£393bn), and fuelled by an economic growth spurt of 7 per cent over the last two years, has overtaken traditional rivals Korea and Mexico. Its tenth place position also dictates that world economic leader, the United States, firmly dominates the top five slots and leaves a host of European nations, including the UK, jockeying for mid-table positions. The third largest economy for example is Germany, now worth $2,714bn (£1,542bn); the fourth is the UK on $2,141(£1,216bn), followed next by France and Italy, in fifth and sixth places respectively. Yet beyond the numerical similarities in terms of GDP, the world’s seven largest economies in 2003 are still the world’s seven largest economies in 2005 - only India is advancing through the rankings, and at a rate that could shake up the status quo. The World Bank said the country has averaged more than six per cent economic growth over the past decade, on the back of foreign investment and an extended programme of economic liberalisation. On the face of India, locations like Bangalore, New Delhi and Gurgaon have become keywords for Western companies pursuing BPO opportunities, software development, cheap labour and call centre operations. Service sectors continue to thrive as the main economic performer, the World Bank said, while manufacturing, currently India’s most regulated sector, emerged as the weakest. A study by an Indian business group predicts the growth rate of exports from IT and IT-enabled services will jump from today’s 30 per cent to 45 per cent by 2008, at a grand value exceeding $50bn US dollars. The Associated Chambers of Commerce and Industry of India says indications show IT exports will soar to 45 per cent “over the next few years”, on the back of a software and services annual growth rate of over 30 per cent. The news comes as the Chancellor, Gordon Brown, told the European Parliament this week that the EU needed to create over 22 million jobs in order to offset competition from “global forces,” offering cheaper workforces. Mr Brown issued his warning a day after ministers from the 12 eurozone countries slashed their growth forecast for 2005 for the second time in just a few months, to 1.3 per cent from 1.6 per cent. “We have to face the fact that Europe has not only been growing at half the rate of the US, but a quarter the rate of China,” said Mr Brown. “We are challenged by global forces from which there is no shelter.” Jul 14, 2005 Email this article Printer friendly page Previous Page
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