As China looks to wean its economy off a heavy dependence on investment and exports, India is embarking on the very same growth model that could see the South Asian nation assuming the role of the world’s factory floor within the next decade.
Prime Minister Narendra Modi has articulated in recent speeches and through policy actions that Asia’s third largest economy is in need of a growth model which centers on export-oriented manufacturing, heavy infrastructure building and urbanization.
“This suggests a shift from India’s current services-driven growth trajectory to an East Asian growth model based on the mass deployment of labor and capital,” Sanjeev Sanyal, global strategist at Deustche Bank wrote in a report.
If India succeeds, it has the potential to become the factory of the world, Sanyal said in an interview with CNBC, a role assumed by China in the past decade.
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