India has topped the list of the fastest growing economies in the world for the coming decade, and will grow at 7.9 per cent annually, ahead of China and the US, as per a Harvard University report. The Centre for International Development at Harvard University (CID) said in new groth projections that countries that have diversified their economies into more complex sectors, like India and Vietnam, are those that will grow the fastest in the coming decade. The report said, “India tops the list as the fastest growing country for the coming decade, at 7.9 per cent annually, in the economic complexity growth projections. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics.”
The report said that India's productive capabilities far exceed expectations for its current income level, which contributes to the projection of rapid growth for the coming decade. The team also find India ranks the best on the criteria termed the Complexity Opportunity Index (COI), which measures the ease of deploying existing knowhow to enter new complex products. “India's existing capabilities have not only diversified its exports, but also allow for easy redeployment into related products that depend on those capabilities, making further diversification relatively easy,” it said. China is projected to grow at 4.9 per cent annually to 2026, the US at 3 per cent and France 3.5 per cent.
The high-ranking means India has several “unrealised opportunities” to diversify into related, high-value sectors to continue to drive productivity growth and job creation. The report added, “Up to now, that potential remains unrealise, however, as India's complexity has not changed over the past decade. The rapid growth that is predicted is effectively capitalising on previous gains in complexity.” It stressed that ensuring the long-run potential of India's economic growth will rely on realising diversification into related products. Another challenge would be to ensure the inclusive nature of this productive transformation, as the gains made in new chemical, vehicle and electronics exports are highly concentrated in specific localities of the subcontinent. “Whether that knowhow can be disseminated into new areas of India will in part determine whether rapid growth can be sustained in the long-term,” the report said.
