India recently unveiled its economic vision through the Union Budget 2024. Amidst global headwinds, the budget revealed an optimistic outlook, indicating continued economic growth for the nation in the coming year and beyond. This optimism is further bolstered by recent positive economic indicators and agreements with other countries painting a picture of a nation on the rise.
Budget highlights boosting growth
The 2024 budget prioritised capital expenditure, allocating more than £100 billion for infrastructure development. This investment aims to enhance connectivity, logistics, and manufacturing capabilities, driving long-term economic growth. Additionally, the focus on skilling and digitalisation aims to equip the workforce with future-ready skills, fostering innovation and productivity. Improved infrastructure is expected to attract foreign investment in projects like dedicated freight corridors, port modernisation and new airports. The proposals for building three major railway corridors and green energy programmes for sustainable development should bode well for the Indian economy. It will also indirectly incentivise foreign investment through reduced logistical bottlenecks, lower operational costs, and efficient supply chains, making India an even more attractive manufacturing and trading hub.
Reinforcing focus on net-zero and technology
Policy proposals in the budget reinforced India’s commitment to its target of achieving ‘net zero’ by 2070. These proposals include measures such as viability gap funding for harnessing offshore wind energy potential, rooftop solarisation for 10 million households, and strengthening of the e-vehicle ecosystem by supporting manufacturing and charging infrastructure and greater adoption of e-buses for public transport.
The budget also aims to encourage research and innovation through approximately £10 billion corpus with a 50-year interest-free loan, and a new scheme to strengthen deep-tech for defence purposes.
The Indian renewable energy sector attracted more than £4.83 billion in foreign direct investment between April 2020 and September 2023. The Government's continued push along with the ever-increasing appetite for energy in India's booming economy are expected to increase this number exponentially in the coming years.
Global collaborations
India is seeing significant collaboration with various other nations to create an increasingly powerful synergy. The United Arab Emirates (UAE) and India have signed agreements for investment cooperation in various sectors. The Ministry of Investment of the UAE has signed three Memorandums of Understanding with India outlining frameworks for the expansion of bilateral investment cooperation in the renewable energy, food processing and healthcare sectors.
The European Free Trade Association (EFTA), comprising Switzerland, Norway, Iceland and Liechtenstein is near to signing a trade agreement with India, which includes patent protection and new type of investment promotion chapter. The deal could potentially lead to the EFTA nations investing as much as £80 billion over 15 years in exchange for India’s market access. The bilateral investment protection agreement with the EFTA could also pave the path for other trade deals that have been at the cusp of being signed for some time such as the India – UK free trade agreement.
Overall, it is clear that the Indian market is thriving with various investment opportunities marking the start of 2024 and an economy that is showing resilience, significant growth and immense potential.
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We would like to thank Kartik Monga and Ceren Ghanem for their contribution to this article.
