President Le Thuy Trang visited and worked with the Indian Business Association
Many Indian companies with billion-dollar revenues are choosing to make long-term investments or are exploring opportunities to invest and expand into Vietnam in new sectors such as information technology, renewable energy, auto parts manufacturing, and high-quality plastic packaging. These investments are oriented towards high-tech products for domestic consumption or export.
The Indian economy is experiencing impressive growth: the country's stock market is booming, the government is heavily investing in infrastructure and clean energy projects, and GDP is projected to grow by 6% this year, surpassing the growth rates of the US and China. However, there is a problem: Indian corporate investment is not keeping pace with such development. The amount of capital that these companies are allocating for future business activities, such as purchasing machinery and building new factories, is stagnating.
In relative terms to the economy, Indian corporate investment is even declining. Although foreign investors are pouring money into the Indian stock market, long-term foreign investment in the country is on the decline.
At some point, when the Indian government needs to cut spending, there will be pressure on the economy if private sector investment does not pick up to fill the gap left by public investment. Currently, no one believes that the Indian economy will stop growing, but a 6% annual increase is still insufficient to meet New Delhi’s ambitions. India’s largest-in-the-world population continues to grow. The government has set a goal to catch up with China economically and become a developed nation by 2047. Most economists believe such a leap requires an annual growth rate of around 8-9%.
The lack of private sector investment also poses a challenge for Narendra Modi, who has been Prime Minister of India since 2014 and is committed to making India a more business-friendly environment for both domestic and international companies. However, the current economic context of India reveals both advantages and drawbacks, and investors continue to maintain a cautious outlook.