With a population of 1.2 billion people and the tenth largest economy in the world, India today is one of the world’s economic powerhouses and its economy has accounted for almost 10% of recent global economic growth. In the near future, the South Asian giant is expected to continue its rapid rise. The population is expected to surpass China to become the world’s largest by 2030. In economic terms, India is expected to become the world’s fifth largest consumer economy by 2025 and, with rapid growth in its middle class, household incomes are expected to triple over the next 20 years.
As a result, India, much like China, has become a major importer and consumer of various kinds of natural resources and primary products. However, although Latin America and the Caribbean exports products such as natural gas (from Trinidad & Tobago) and cocoa (from the Dominican Republic) to India, the region currently has less than a 4% share of India’s total imports.
The story for outward foreign direct investment (FDI) is similar. India has emerged as a significant investor worldwide, with outward FDI amounting to $17 billion (USD) between 2008 and 2010. However, Latin America and the Caribbean received just about 4% of the total. Of this relatively small amount, 70% was directed at the British Virgin Islands and the Cayman Islands – primarily financial transactions.
Without a doubt, India has been under-exploited by the Caribbean in the global economic race. The resource-rich exporting nations of the Caribbean should look to develop closer partnerships with Indian firms that would provide access to the Indian market and to sophisticated technology. Caribbean countries should look to follow the lead of Mexico, which has successfully wooed Indian multinationals such as Tata Consultancy Services, Wipro and Aptech, all of which have established operations in the country.
Finally, for the tourism and real estate-dependent nations of the Caribbean, the growing number of Indian middle class consumers, high net worth individuals and private sector investors with deep pockets are an untapped economic opportunity. According to The Economic Times, the number of Indians travelling overseas is predicted to increase from 15 million to 50 million by 2020, making India the world’s fastest-growing outbound tourism market and the second biggest spender on overseas travel after China. With a large Indian diaspora spread across the region, Caribbean countries are in an ideal position to exploit historical and cultural links and the opportunity India represents to the Caribbean should no longer be overlooked.