India to become world’s 3rd largest importer by 2050: UK Report

India will become the world’s 3^rd largest importer by 2050 with a share of 5.9 per cent of global imports, following China and the United States (US), stated a new report titled Global Trade Outlook by the Department of International Trade in the UK. Currently, India ranks 8^th among the largest importing nations with a 2.8 per cent import share and is on the way to becoming the 4^th largest importer by 2030. A growing middle class and its rising discretionary spending are seen as contributing factors.

US and EU share of imports expected to decline: UK Report

The Global Trade Outlook report projected that the import trends will change as the share of global imports of the US and European Union (EU) is expected to decline while the global share of imports of Asia is expected to rise.

The change in import trends is expected particularly in the travel, food, and digital services sectors as the growing wealthy populations in the Indo-Pacific region are expected to increase consumption of more discretionary goods.

56 per cent of global growth is expected to come from the Indo-Pacific region between 2019-2050 compared to a quarter share from North America and the EU combined. The rising contribution from the South Asia region primarily driven by India is expected to rebalance the growth within the Indo-Pacific region.

Gradual shifting of the world’s centre of economic gravity towards East

The report noted that the shift in import and trade patterns is also attributed to the gradual shifting of the world’s centre of economic gravity towards the East for the past decades. One of the major reasons for this shift in economic gravity towards the East is owed to the rapid progress of China.

By 2030, China is expected to become the world’s largest economy. Years ago, it already displaced the US in terms of Purchasing Power Parity (PPP). During the time of China overtaking the US, “both the countries will account for around 22 per cent of global GDP”, the report highlighted.

India to become world’s 3^rd largest economy

The Global Trade Outlook report also stated that India will jump to 3^rd place by 2050 in the ranking of the world’s largest economies, just behind China and the US, with a share of 6.8 per cent in global GDP.

Currently, India ranks 5^th in the ranking of the world’s largest economies with a share of 3.3 per cent in global GDP. India is likely to become the 4^th largest economy as its GDP is expected to cross Germany by 2030.

Challenges for emerging economies as per UK report

The report by the UK noted that while India and other emerging economies are on a trajectory of growth, they have several challenges ahead such as the need to shift from imitation to innovation, tackle high levels of debt, tackle income inequality, and recover from the loss caused by COVID-19 pandemic.