India will become 3rd largest importer by 2050: UK report

What is the News?

The UK’S Department of International Trade has released a report titled ‘Global Trade Outlook‘.

What are the key findings of the report?

India’s Imports

Currently, India is the eighth-largest importing country, with a 2.8% import share. It is set to become the fourth-largest importer by 2030. 

Moreover, India will become the world’s third-largest importer by 2050 with a share of 5.9% of global imports, right behind China and the US.

A shift in Economic Activity

Between 2019 and 2050, 56% of global growth is expected to come from the Indo-Pacific, compared with a quarter from the EU and North America combined.

China will be the major driver of this economic shift as it is expected to become the world’s largest economy by 2030. 

Note: China has already displaced the US in Purchasing Power Parity (PPP) terms (which account for differences in local prices) in the mid-2010s. But based on market exchange rates, the change is expected to happen around 2030.

Moreover, India is projected to become the third-largest economy by 2050 just behind China and the US with a share of 6.8% in global GDP. At present, India is ranked fifth in the size of the world’s economies, with a share of 3.3%.

E7 Group of Economies

The ‘E7 group’ of the seven largest emerging economies—China, India, Brazil, Russia, Indonesia, Mexico and Turkey—are projected to equal the G7’s (Canada, France, Germany, Italy, Japan, the UK and the US) share of global import demand by 2050.

What are the concerns highlighted in the report?

The report has cautioned that while emerging economies have ‘catch up’ potential. They also face major challenges—including the need to shift from imitation to innovation to escape the middle-income trap, tackle indebtedness and rebound from covid.

Source: This post is based on the article “India will become 3rd largest importer by 2050: UK report” published in Livemint on 20th September 2021.