India: A Growing Economic PowerIndia is the third largest economy in the world, following only the U.S. and China. India recently surpassed Japan in overall GDP. As one of the "BRIC" nations - Brazil, Russia, India, China - it is a cornerstone of global economic growth over the next decade.
According to Jim O'Neill, the economist who first spotted the BRIC growth trends,
"India definitely has the biggest potential for growth among BRIC countries this decade. India has incredible demographics.... During the next 20 years, the increase in the size of the working population in India could be as large as the total number of people working in the U.S. today. It is absolutely incredible."
With two hundred and fifty million Indians about to enter the market within the next fifteen years, India is actively developing its manufacturing capabilities. Foreign businesses are taking interest, with Volkswagen and Mercedes both investing in factories, and for good reason. Indian labor costs are at under a dollar an hour officially, and an unskilled laborer may only make four dollars a day, making it highly competitive compared to the Chinese market, and cut-rate when compared to the American market. Firms such as Tata steel boasting an eight fold increase in worker output over the past decade, leading to superior global economics. Manufacturing currently accounts for over 26% of GDP. A Mckinsey & Company analysis forecasted India's manufacturing sector could increase six-fold within the next twelve years. The Minister of Commerce and Industry has called for development in NIMZ or "National Investment and Manufacturing Zones." Volkswagen invested $700 million into a plant in Pune, and Mercedes-Benz opened a factory nearby. Tata is manufacturing budget cars, as well as assembling Land Rovers. And suppliers are relocating nearby. However infrastructure - electric grid and transportation/logistics - remain considerations.