Brave New World — India in 2023

India can now import coal from Australia at 0% customs duty!

Not just coal, Australia will give preferential access to India for 100% of its products! This is the first time Australia has done this for any country.

The India — Australia trade pact came into effect last week.

In this deal, India will primarily benefit from cheaper coal. Coal accounts for 3/4th of our imports from Australia, and now it will be duty-free! This will make coal cheaper for the Indian power sector and help industries become more competitive.

Presently, Australia charges 4–5% import duty on most Indian goods. This makes our goods expensive in the Australian market. After this deal, 96% of our exports will become duty-free. Thus, our goods will become cheaper, directly benefiting Indian exporters.

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On the other hand, Australia will gain better access to one of the fastest-growing economies, as 85% of its exports will enter India duty-free. This will make them cheaper for Indian consumers.

This historical deal took 10 years to close! But the wait seems worthwhile. The trade between the two countries will double in just five years and create around 10 lakh jobs in India.

At a time when countries are diversifying away from China, India is making the most out of the opportunity via these trade pacts.

Hope to see more such deals in the near future!

Pic credits: The Economic Times

2022 ended for India on an optimistic note. The economy is robust and growing. The country bounced back from the Covid aftereffects, and economists expect it to stay the fastest-growing large economy for the next decade.

But economists have a history of being wrong before. As Paul Samuelson once said, “Economists have predicted nine of the last five recessions”. So, we can’t trust their judgement. But forget economists, even the most intelligent people are wrong about the future. It’s almost impossible to get your predictions right. The world is way more uncertain than we like to believe.

Aldous Huxley is considered one of the fathers of science fiction alongside HG Wells and Jules Verne. In his famous book, Brave New World, he predicted a dystopian universe. But what stays with me after years of reading that book is how his characters use helicopter taxis to go down to offices to use landline phones. He didn’t predict mobile phones.

This shows how even the wisest can be wrong. Hence, it a folly to predict what this year or the next 10 years will bring for India. India might become a $10 T economy by 2035 or its growth can taper off and stagnates at $5 T. We don’t know what the future will bring.

But what makes me positive about Indian economic growth everything is pointing towards it. While the developed world faces an economic slowdown or even a recession, India is expected to grow at 6%. That’s heartening news.

Two things especially make me optimistic about India.

1. Low economic base: The country is so poor that the only way is up. Economists talk about a mid-income trap where some countries stop growing once they reach a certain GDP per capita. The growth stagnates, and they don’t become a high-income economy. Although there’s no scientific rationale behind this trap, assuming it exists, India is far from hitting it.

At a GDP per capita of $2,500, a mid-income status is far. We can talk about it once India hits the $10,000 mark. That means a $15 T economy. That’s way ahead in the future.

2. Right infrastructure: A decade or two of rapid growth needs the right physical and technological infrastructure. India has already achieved it. Now it only has to build on it. Many internal and external factors can derail this growth trajectory, but the chances are low.

I firmly believe the next 10 years belong to India. This is the time to create wealth for ambitious people as the country adds $7 T GDP over the next decade. It’s an exciting time for everyone, especially the youth who will benefit most from this quick growth.

India can become a $40 trillion economy by 2047 when it will mark the centenary of independence, Reliance Industries’ chairman Mukesh Ambani said on his father Dhirubhai Ambani’s birth anniversary, also celebrated as Reliance Family Day.

Ambani said that the next 25 years are going to be transformational for India. The billionaire said that the goal is realistic and achievable in a sustainable and stable manner. He added that India is ‘blessed with the power of young demography, mature democracy and newly acquired power of technology.’

‘From an era of shortages, scarcity & widespread poverty, India will enter an era of inclusive prosperity, abundance of opportunities, & unimaginable improvement in the ease of living and quality of life of 1.4 billion Indians,’ he said.

Ambani referred to India as a ‘shining spot’ at a time when there is uncertainty, volatility and regression in many parts of the world, with many fearing the onset of another recession in 2023.

Ambani further shared his goals for his conglomerate that has spread into sectors including telecom, retail and oil, assigning roles to his three children.

His elder son Akash will head the telecom sector, daughter Isha will head the retail business and the youngest son Anant will head the energy business.