Press Release
India’s GDP Will Grow to $5 Trillion by 2025; More Global Investment Will Provide Additional Sources of Capital and Financing for India’s Businesses and Government. New Initiatives Include Navigating Inclusion Process for Global Indices and Supporting International Financial Services Center Development
India’s GDP Will Grow to $5 Trillion by 2025; More Global Investment Will Provide Additional Sources of Capital and Financing for India’s Businesses and Government. New Initiatives Include Navigating Inclusion Process for Global Indices and Supporting International Financial Services Center Development
NEW YORK,September 25, 2019 – Today at the third annual Global Business Forum, Michael R.
Bloomberg welcomed Indian Prime Minister Narendra Modi and announced two new
initiatives in partnership with the Government of India, focused on
strengthening international investment. These two new initiatives – partnering
with India to navigate inclusion in global benchmark indices, and supporting
the development of India’s International Financial Services Center (IFSC) at
the Gujarat International Finance Tec-City (“GIFT City”) – will leverage
Bloomberg’s expertise and connectivity to help international investors access
India’s capital markets, in turn providing India’s businesses and government
with new funds to invest and grow.
Projections from Bloomberg Economics
show that India’s GDP will grow from $2.7 trillion in 2019 to $5 trillion by
2025 and $8.4 trillion by 2030. This amounts to an average annual growth rate
of 8%, and would make India’s economy the third largest by 2026, behind only
China and the U.S. Economists say that increased foreign investment is an
important component of stable growth, providing additional sources of capital
and increasing lending capacity to businesses and government. Global investors, including pension and
mutual funds, would also benefit by having access to the higher returns from a
growth market that may outpace domestic returns.
“Currently, the share of India’s
outstanding sovereign debt held by foreign investors — at less than 4% — is
substantially lower compared to major developed and many major emerging market
economies,” said Abhishek Gupta, Bloomberg’s India Economist. “India has raised
the limits on foreign exposure to its debt, which means there is room to
stimulate and attract more foreign investment. Inclusion in global benchmark
indices could mean upwards of $50 billion to $125 billion of new investment in
India’s economy, ensuring a more stable path to growth.”
Bloomberg and India will partner on two
new initiatives to promote global investment:
Navigating Inclusion in Global
Benchmark Indices: Together with the Indian Ministry of Finance, Reserve Bank
of India, Securities and Exchange Board of India and key financial
institutions, Bloomberg will work with India to navigate the process to gain
inclusion in global benchmark indices to significantly increase the country’s
ability to attract capital to its bond markets. These indices have
traditionally helped countries attract foreign capital, but required
significant, time-intensive reforms at the local level. Bloomberg will, among
other actions, convene senior Indian officials and investors from prominent
financial centers to solicit feedback and diverse perspectives needed to
enhance India’s bond markets.
Supporting the Development of the
International Financial Services Center: Bloomberg will set up a series of
workshops to identify global best practices to enable the IFSC to achieve its
full potential as a world-class international financial hub. These workshops
will convene senior IFSC and GIFT City leaders, Indian government officials,
and investors from other regional investment hubs. At the roundtables, all stakeholders
will participate in in-depth discussion to identify pressing challenges facing
GIFT City, and evaluate potential opportunities for collaboration between
investors, GOI, and state-level officials.
“Prime Minister Modi has charted an
ambitious agenda to unlock India’s growth potential. I’m very pleased that we
can play our part to ease access to India’s capital markets, which will raise
funds for Indian businesses to invest and grow and India’s government to invest
in infrastructure and public services,” said Michael R. Bloomberg, Founder of
Bloomberg L.P. and Bloomberg Philanthropies. “By drawing in the necessary
foreign investment, I have no doubt that India’s economy will reach new
heights.”
“The roadmap for India’s growth has
taken shape. India has set an ambitious target for itself of 5 trillion,” said
Indian Prime Minister Narendra Modi. “It is a golden opportunity for the
business world to form partnerships with India to accompany it on its journey.
In the past five years, we have seen foreign direct investment of $286 billion
– half of the total of the previous 20 years. Our people are rapidly defeating
poverty, moving up the economic ladder and with increasing purchasing power –
thus if you want to invest in a market where there’s scale, come to India.”
The Prime Minister’s keynote address to
heads of state from six continents and over 200 CEOs officially opened the 2019
Global Business Forum (GBF). In its third year, the Forum has become a
preeminent global event, bringing together business and government to drive
actionable solutions to the world’s most pressing challenges by fostering
engaging conversation and dialogue amongst leaders across industries and around
the world.
After announcing these two initiatives,
Mr. Bloomberg held a fireside chat with Prime Minister Modi, where the two
leaders discussed a range of critical topics impacting the international
community. These included opportunities to strengthen global economic
stability, tackle climate change, promote economic growth, and advance
technologies that can improve society.
Contact:
Bloomberg Press Office
inquiry1@bloomberg.net
(212) 617-1404
