5 Conclusion
68. India's economy has enjoyed annual growth rates
of around 9 per cent in recent years.[196]
In a recent assessment of the global economic outlook, PricewaterhouseCoopers
projects growth for India at the only slightly lower rates of
8.6% in 2008, and then 8.2% in 2009.[197]
Their longterm forecasts to 2050 for India predict average
annual per capita GDP growth of 5.0%, putting India second behind
only Vietnam (6.0% annual growth), and well ahead of the G7 group
of developed economies (averaging 1.9%).[198]
However, recent shocks to the world's financial markets should
remind policy makers and business people that nothing can be taken
for granted in a global economy. Similarly, India's economic development
may slow. After a period of rapid expansion, it is not surprising
to see some commentators raise questions about India's future.[199]
The country has seen remarkable success and has many advantages,
including a young demographic structure and a well-established
democratic system. But, as this report has detailed, barriers
remain. Commentators have remarked on the limits of the political
system, and the inefficiencies in its extensive bureaucracy.[200]
The continuation of huge poverty (around three-quarters of the
population live on less than two dollars a day),[201]
inadequate infrastructure and high levels of government debt all
mean that the country faces real challenges in maintaining recent
levels of economic growth.
69. Yet although there are significant uncertainties,
there are also real opportunities. The Indian middle class continues
to grow, Indian business is now supremely confident and the huge
deals companies like Tata are entering into demonstrate a determination
from which Britain is uniquely well placed to gain advantage.
There is a reservoir of goodwill towards Britain in India which
should give us a competitive edge in trade and investment relations
unmatched by any of our competitors.
70. We need to establish a relationship as special
with India as the one we have enjoyed with the US. This will require
determination on both sides—and a willingness to address
issues both large and small. The recommendations in this report
on education links, on visas, on the future of JETCO, on the work
of UKTI and on trade negotiations need to be seen against this
wider picture.
71. The UK has woken up to India, but progress
must not now be slowed in response to global concerns or expressions
of doubt about India's future. Engagement will benefit both partners.
Whether or not India grows as fast as other emerging markets,
it is a country of over a billion people, and the opportunities
are huge. As Government and business engagement continues to grow,
the United Kingdom is uniquely well placed to take advantage of
those opportunities.
196 Ev 70 (UKTI) para 1.10 Back
197
PricewaterhouseCoopers, UK Economic Outlook, March 2008,
table A1, p32; http://www.pwc.co.uk/pdf/UK_Eco_Outlook_mar_08.pdf?utr=1 Back
198
ibid. table 4.5, p29 (Note: long-term forecasts for GDP per capita
at PPPs). Back
199
See for example "What's holding India Back?", The
Economist, 8th March 2008 Back
200
"Battling the Babu Raj", The Economist, 6 Mar
2008;
http://www.economist.com/world/asia/displaystory.cfm?story_id=10804248
Back
201
World Bank, World Development Indicators, 2004 and (Indian)
National Commission for Enterprises in the Unorganised Sector,
Report on Conditions of Work and Promotion of Livelihoods in
the Unorganised Sector, August 2007 (via House of Commons
Library) Back
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