India well on its way to becoming a $5 trillion economy by 2025

[Chanakya's_Chant]

Whole lot of durable purchase plans have either been shelved or postponed. So companies who have reduced their inventory levels in last year and a half would hesitate in ramping up the production just because a certain personality is heading the govt.

One month after the PM came to power $ was trading at ~ higher 58.x and now it is a tad above 63 ( despite the claimed reforms ) and if an indian is into currency trading, short the $ now will be my suggestion.

The local currency should already have traded ~65-67 but the perception is what has held it up to the current level.

Some similar snippets :

Rupee Challenge Likely for Jaitley, Rajan in 2015 - NDTVProfit.com

Why exactly?

I thought Indian business confidence has been improving a lot lately?

Actually, the NDF market is just looking at what is happening to the emerging market currencies. Anybody can notice the way the Indonesian rupiah or even the Russian ruble have been battered. The Indian rupee withstood this assault mainly because there were lots of capital flows there.

For the past year, the RBI has done a considerably good job in keeping it range bound between 60 and 62. However, the main concern with the Rupee is not a domestic one; practically all major currencies have depreciated against the US Dollar. When we look at the Rupee against other currencies, it has not fared that bad. While the Rupee has depreciated 2.68% against the US Dollar over the past 12 months, it has actually appreciated 6.95% against the Euro and remained flat against the Pound. (The Euro, in fact, has depreciated almost 9% against the US Dollar during the same time). This indicates that the US Dollar is simply appreciating against all major currencies in the world.

That being said, India is trying its best to keep the Rupee in a comfortable spot against the Dollar. The RBI has been selling dollars in a massive fashion. By selling dollars, the amount of dollars in circulation increases, causing the dollar’ value to drop. The Reserve Bank is keen on keeping the dollar in a comfortable zone as India imports 2/3 of its oil needs, and while a weaker Rupee helps export driven sectors, it leaves the country vulnerable to currency movement. The latest trade deficit and industrial production figures signaled that growth is being stunted in the country. A rate cut by the RBI will certainly help ease short term concerns. But through the long term, RBI will have to allow the rupee to depreciate, as this is good for the economy.

First India need to cross $2 trillion, currently at $1.62 trillion.

It already has - India's GDP is valued at $2.047 trillion (Nominal #10th) and $7.277 trillion (PPP #3rd) in 2014

Courtesy - International Monetary Fund (IMF) - Report for Selected Countries and Subjects

Agree,. dont know why people keep talking about being a $5 trillion economy 10 years from now when the country hasn't even crossed $2 trillion economy yet(and many predicted they will have done so way back in 2011). Thing is we can never guess for sure what the future holds, for we dont know what will happen even n=this year, much less next year. Do more , talk less. Why not just wait when it happens before start talking about it? Its always better to aim high privately but talk low publicly than otherwise. Wishing all the best to India though.

I think you missed my post gentleman.

 

[mike2000]

Maybe we should talk about it when we have done it. For now when we will cross 2T mark?

Agree,. dont know why people keep talking about being a $5 trillion economy 10 years from now when the country hasn't even crossed $2 trillion economy yet(and many predicted they will have done so way back in 2011). Thing is we can never guess for sure what the future holds, for we dont know what will happen even n=this year, much less next year. Do more , talk less. Why not just wait when it happens before start talking about it? Its always better to aim high privately but talk low publicly than otherwise. Wishing all the best to India though.

 

[Echo_419]

Agree,. dont know why people keep talking about being a $5 trillion economy 10 years from now when the country hasn't even crossed $2 trillion economy yet(and many predicted they will have done so way back in 2011). Thing is we can never guess for sure what the future holds, for we dont know what will happen even n=this year, much less next year. Do more , talk less. Why not just wait when it happens before start talking about it? Its always better to aim high privately but talk low publicly than otherwise. Wishing all the best to India though.

It already has - India's GDP is valued at $2.047 trillion (Nominal #10th) and $7.277 trillion (PPP #3rd) in 2014

View attachment 180294

Courtesy - International Monetary Fund (IMF) - Report for Selected Countries and Subjects

 

[anonymus]

Agree,. dont know why people keep talking about being a $5 trillion economy 10 years from now when the country hasn't even crossed $2 trillion economy yet(and many predicted they will have done so way back in 2011). Thing is we can never guess for sure what the future holds, for we dont know what will happen even n=this year, much less next year. Do more , talk less. Why not just wait when it happens before start talking about it? Its always better to aim high privately but talk low publicly than otherwise. Wishing all the best to India though.

India has GDP of $2047 billion ie $2.047 trillion (Since this is estimate, it could be a little higher or lower$2 trillion).

And reaching $5 trillion in 10 years is no big deal. Even in worst case scenario that would be reached. It requires only 9.59% nominal growth ( real GDP growth + inflation + currency appreciation + monetary tightening - depreciation - monetary loosening) to reach there.A real GDP growth rate of 5-6% would be enough.

 

[Providence]

India has GDP of $2047 billion ie $2.047 trillion (Since this is estimate, it could be a little higher or lower$2 trillion).

And reaching $5 trillion in 10 years is no big deal. Even in worst case scenario that would be reached. It requires only 9.59% nominal growth ( real GDP growth + inflation + currency appreciation + monetary tightening - depreciation - monetary loosening) to reach there.A real GDP growth rate of 5-6% would be enough.

Thanks ! A lot of people tend to be confused when it comes to discussing REAL/PPP/NOMINAL GDP growths. A 2 to 5Trillion will be an underachievement if one has to ask me.

 

[The enlightened]

It's backed by secondary data which is not available in public domain.

Simply put you have nothing and were imagining all that $hit.
The rupee's current depreciation has little to do with India just as its dep. in 2013 had little to do with us (perhaps not little but mainly Fed taper paranoia). Demand for consumer durables hasn't gone down. Its growth did temporarily in FY 12-13 and 13-14

From all known estimates, its supposed to grow at 10%+ CAGR. The fortunes of this market are closely linked with the growth in disposable income, which in turn is related to economic growth. As is well known(as opposed to some secondary classified data), indian economy hasn't done so well for the past 2 years. But all forecast by everyone point to it returning to a high growth phase shortly. Don't know what $hit you are smoking out there. Must be some pretty strong stuff.

Still no sign of your 'calculations' to show the rupee dying.

 

[Providence]

Simply put you have nothing and were simply imagining all that $hit.
The rupee's current depreciation has little to do with India just as its dep. in 2013 had little to do with us (perhaps not little but mainly Fed taper paranoia). Demand for consumer durables hasn't gone down. Its growth did temporarily in FY 12-13 and 13-14
View attachment 180299
From all known estimates, its supposed to grow at 10%+ CAGR. The fortunes of this market are closely linked with the growth in disposable income, which in turn is related to economic growth. As is publicly known(as opposed to some secondary classified data), indian economy hasn't done so well for the past 2 years. But all forecast by everyone point to it returning to a high growth phase shortly. Don't know what $hit you are smoking out there. Must be some pretty strong stuff.

Still no sign of your 'calculations' to show the rupee dying.

Okay. I will re open the thread once $ touches 67 in coming Aug-sep timeline.

 

[The enlightened]

Okay. I will re open the thread once $ touches 67 in coming Aug-sep timeline.

I thought it was going to reach 71 in 'few months'. And not even an attempt to defend your earlier claim of durables.

Sure. Do that please but in the meanwhile stop pretending to be some hotshot economist. You fool nobody here.

 

[Nihil]

What about China in 2025? Will it cross 15 trillion mark?

At 9% GDP growth per annum, it will reach a nominal value of $16 trillion dollars in 2025. Current growth rates are around 8% per annum. So most likely it will.

 

[mike2000]

Thanks ! A lot of people tend to be confused when it comes to discussing REAL/PPP/NOMINAL GDP growths. A 2 to 5Trillion will be an underachievement if one has to ask me.

not really, it wont be an underachievement, since it will mean India more than doubling its GDP in 10 years. which is a major achievement. As i said, its better to just wait until that has arrived before talking about it, than always indulging in some sensesless estimation of this or that figures, since it will only make the country look bad/underperforming if it doesnt achieve this by that time as thought/estimated. Just like many of our intellectuals/scholars/economist were estimating India will cross the 2 trillion mark by 2011 latest, but its only now its even crossing this mark. So as i said, many things can happen this year and even more so next year which we cant predict. So predicting a particular figure about 10 years from now is all but laughable.lol Moroever, nobody considers PP when making international comparisons, if not China will be the largest economy already in the world. we all look at nominal GDP .

So lesson should be learned from this and avoid always saying this or that estimate everytime. Its better for everyone that way.

 

[temujin]

Whole lot of durable purchase plans have either been shelved or postponed. So companies who have reduced their inventory levels in last year and a half would hesitate in ramping up the production just because a certain personality is heading the govt.

One month after the PM came to power $ was trading at ~ higher 58.x and now it is a tad above 63 ( despite the claimed reforms ) and if an indian is into currency trading, short the $ now will be my suggestion.

The local currency should already have traded ~65-67 but the perception is what has held it up to the current level.

Some similar snippets :

Rupee Challenge Likely for Jaitley, Rajan in 2015 - NDTVProfit.com

Genuine question-why would someone short $ (unless they want to commit financial suicide) if it is expected to appreciate further against the Rupee? You generally 'short' something if you expect it to decline in value and not the other way round

As for the rest of your post, I agree with the general thrust of it i.e. the Indian Ruppee is likely to trend lower vs the $ in coming months but, in my view, the main downside risks for the Ruppee are not from CPI due to stretched inventories but rather successive cuts in RBI benchmark rates due to moderating inflation and flagging growth as well as possible loss of confidence due to the governments inability to implement reforms, control the budget deficit etc..In any case, a cheaper Ruppee should broadly benefit the Indian economy, particularly since its unlikely to feed through into higher inflation at present due to falling crude prices..

 

[Providence]

Genuine question-why would someone short $ (unless they want to commit economic suicide) if it is expected to appreciate further against the Rupee? You generally 'short' something if you expect it to decline in value and not the other way round

As for the rest of your post, I agree with the general thrust of it i.e. the Indian Ruppee is likely to trend lower vs the $ in coming months but, in my view, the main downside risks for the Ruppee are not from CPI due to stretched inventories but rather successive cuts in RBI benchmark rates due to moderating inflation and flagging growth as well as possible loss of confidence due to the governments inability to implement reforms, control the budget deficit etc..In any case, a cheaper Ruppee should broadly benefit the Indian economy, particularly since its unlikely to feed through into higher inflation at present due to falling crude prices..

Was a definite typo. Apologies. Thanks for pointing.

As for the rest of your post, I agree with the general thrust of it i.e. the Indian Ruppee is likely to trend lower vs the $ in coming months but, in my view, the main downside risks for the Ruppee are not from CPI due to stretched inventories but rather successive cuts in RBI benchmark rates due to moderating inflation and flagging growth as well as possible loss of confidence due to the governments inability to implement reforms, control the budget deficit etc..In any case, a cheaper Ruppee should broadly benefit the Indian economy, particularly since its unlikely to feed through into higher inflation at present due to falling crude prices..

There are a lot of reasons for the impending decline in INR vs $

An impending rate hike by Fed in it's June meeting will have a huge impact on the $ flow to many emerging countries. It will also effect the CAD. Also despite the low crude prices, india's balance of payment hasn't improved much which can be due to surge in import of non-oil commodities like Gold and fledgling export data.

The $ has also been gaining against all currencies and the strengthening is broad based and likely to continue well into future.

There are a lot of supply side constraints in Indian economy ( stunted demand and high working capital cost and rising labour cost ).

There is also one more reason why in a medium horizon India's 9% growth story cannot be repeated. Because that phase of growth was mostly supported by labour arbitrage vis-a-vi China. Now India has many competitors like vietnam etc.

Also the labour market is abysmally poor in India. Eg. Nearly 89% of the 50 million or so jobs in India's manufacturing sector -- approximately half of the number of equivalent jobs in China -- are in informal and unorganized low-productivity sectors.

The glut of subscale and low-productivity manufacturing in India becomes clearer when one notes that 84% of manufacturing employment is in companies with fewer than 50 workers, compared with just 25% in China. Value added per manufacturing worker, in this category, is less than 10% of China's level. More than 50% of manufacturing workers in India manage without electricity.

The level of gross domestic savings, currently running at 26% of GDP, according to the World Bank, is just over half of China's 51%. The rate is far below the investment needs of country like India.

 

[Viper0011.]

India has GDP of $2047 billion ie $2.047 trillion (Since this is estimate, it could be a little higher or lower$2 trillion).

And reaching $5 trillion in 10 years is no big deal. Even in worst case scenario that would be reached. It requires only 9.59% nominal growth ( real GDP growth + inflation + currency appreciation + monetary tightening - depreciation - monetary loosening) to reach there.A real GDP growth rate of 5-6% would be enough.

Good for India. This is what I call hard work as ONE nation with focus on growing your country to way beyond where it was just 20 years ago. Awesome national / team work. Wish the readers here from Pakistan can build a nation and a team like this, vs. Individualism.

 

[vayuu1]

Good for India. This is what I call hard work as ONE nation with focus on growing your country to way beyond where it was just 20 years ago. Awesome national / team work. Wish the readers here from Pakistan can build a nation and a team like this, vs. Individualism.

Thanks buddy, hope that Pakistan comes out of the mess it's in, sometimes reading discussions on this forum regarding hindu's , muslims and china, I sometimes think that we take so much pride in our cultures, our religion, if we take so much passion in taking care of respective countries, situation will improve a lot, pak members take so much pride in growing economy of china,does this growth belongs to pakistan?no!!, India appreciates china 's dedication ,but does it mean we shouldn't learn a thing or two from them, I think ultimately the future of both the countries lie in the hands of both countries,had circumstances of south Asia been normal, it would have been one of the fastest devloping area in the world by now, hope situation improves in future.

 

[dray]

not really, it wont be an underachievement, since it will mean India more than doubling its GDP in 10 years. which is a major achievement. As i said, its better to just wait until that has arrived before talking about it, than always indulging in some sensesless estimation of this or that figures, since it will only make the country look bad/underperforming if it doesnt achieve this by that time as thought/estimated. Just like many of our intellectuals/scholars/economist were estimating India will cross the 2 trillion mark by 2011 latest, but its only now its even crossing this mark. So as i said, many things can happen this year and even more so next year which we cant predict. So predicting a particular figure about 10 years from now is all but laughable.lol Moroever, nobody considers PP when making international comparisons, if not China will be the largest economy already in the world. we all look at nominal GDP .

So lesson should be learned from this and avoid always saying this or that estimate everytime. Its better for everyone that way.

India's GDP:

Year 2000 : $474,692,000,000

Year 2005 : $834,215,000,000

Year 2010 : $1,710,910,000,000

10 years is too long for doubling our GDP, let's talk about 5 years. Given the past performance that can't even be said "Raising the bar".

India - GDP

India has GDP of $2047 billion ie $2.047 trillion (Since this is estimate, it could be a little higher or lower$2 trillion).

And reaching $5 trillion in 10 years is no big deal. Even in worst case scenario that would be reached. It requires only 9.59% nominal growth ( real GDP growth + inflation + currency appreciation + monetary tightening - depreciation - monetary loosening) to reach there.A real GDP growth rate of 5-6% would be enough.

Thanks ! A lot of people tend to be confused when it comes to discussing REAL/PPP/NOMINAL GDP growths. A 2 to 5Trillion will be an underachievement if one has to ask me.

China was at $1.9 trillion in 2004, they are now close to $10 trillion with roughly 10% of average real growth, we should at least be at $8 trillion, if not at $10 trillion, we have done better than this before even with unstable or callous governments.

Further, during the last 10 years CNY has appreciated by roughly 25% adding to its GDP, in last 3 years INR has depreciated by roughly 30%-35%, so it has enough upward potential adding to the growth of GDP without actually appreciating from its historical prices.

@kaku1 @Guynextdoor2 @Chanakya's_Chant @Chinese-Dragon