India seems to be the flavour of the season. The foreign media is writing laudatory articles about the rise of the digital economy and the demographic dividend of a country that is now the most populous in the world. There are some adverse comments about the lack of inclusivity but these are largely buried in the good news about the expansion of Big Tech like Apple. The splashy launch of its first retail stores here made headlines even though it has only a small share of the smartphone market. The ‘China Plus’ policy being followed by many multinationals has also brought India into the limelight as investors search for alternative manufacturing centres. Here too Apple has set the tone with its collaborators like Foxconn making big investments in the southern states of Tamil Nadu and Karnataka.
Gloomy Global Outlook
The question is, how come India is looming so large in the perceptions of both foreign investors and media. The reasons are not far to seek. With a bleak geopolitical scenario, given the dismal prospects of an early end to the Ukraine war, the ripple effects continue to impact countries around the world. Inflation remains sticky, ranging from five to seven percent in OECD economies. Aggressive rate hikes by central banks persist though the US Federal Reserve has hinted it will shortly take a pause. To add to the gloom, the global banking industry is in trouble with contagion risks imminent as medium-sized banks like First Republic in the US are failing in the wake of the collapse of the Silicon Valley Bank.
Fossil fuel prices and availability also remain an area of concern for most countries. Oil prices have stabilised to less than $80 per barrel after OPEC+ flexed its muscles and cut production quotas in early April. But there is little certainty about the outlook for oil markets for the rest of the year.
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