3/15/2015

Davos2015:Indiarevsupitsgrowthengine

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04February2015

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Davos2015:Indiarevsupitsgrowthengine
JLL'sAnujPuriinvitesinvestorstoexploretheIndianeconomyasit
entersaneweraofgrowth,fuelledby'Modimania'andarevitalising
reformagenda

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FreshfromthefrostyslopesofDavosinSwitzerland,whichonceagainformedascenicbackdroptotheannual
meetingoftheWorldEconomicForum(WEF),JLLIndia'sChairmanandCountryHead,AnujPuri,reflectsonIndia's
remarkableprogressunderitsnewleadership.
InMay2013,Indiawasdubbeda'fragile'nationbut20monthsonit'soneoftheworld'smostpromisingeconomies.
IftherecentIMFpredictionprovescorrect,India'sGDPgrowthwilloutpaceChinaby2016.
Thenation'seconomicrevivalwasreflectedinitspresenceatthisyear'sWEF.120delegatesattended,morethan
China,whereaslastyearIndiawasconspicuousinitsunderrepresentation.
"In2013therewasnoposterboyforIndia,butthat'schangedwithPrimeMinisterModi.Indiawasfrequently
mentionedthisyear,"saidPuri.
Thereasonsbehindthisimpressivelyquickturnaround,hesays,canbeattributedtoa'smartgovernmentclearly
intentonmakingbusinessreforms'.
MadeinIndia
Indiaisbackinbusiness,withabrandnewslogantoboot:MadeinIndia.WhenPrimeMinisterNarendraModicame

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Davos2015:Indiarevsupitsgrowthengine
topowerinMay2014,hepromisedaraftofreformsthatwouldflipthenation'srelianceontheITservicessectorto
createamanufacturingcentriceconomy,asChinahasoverthepastfewdecades.
"Multiple'MakeinIndia'signsandhoardingswerevisibleallacrosstheconferencevenueandthissentthecountry's
pridebarometersoaring,"saidPuri.
"ModiisfromGujarat,themanufacturingengineforIndiaandheunderstandsthissector,"headded."Muchof
India'svastdemographicdividendisunfitfortheservicesectorModiislookingtoskillthesepeoplewithtradesfor
themanufacturingindustry."
Hiscommitmenttosupportpublicfirmswithmuchneededfinancinghasservedasafurthershotinthearmfor
manufacturing.CoalIndiareceivedarousingreceptionfromtheequitymarketsjustlastweek.
Thegovernmentaimstoraisetherelianceonmanufacturingto25percentoftotaleconomicoutputby2022,up
fromthecurrent16percent,tocreate100millionjobs.ButstumblingblocksstandinthewayofIndiarealisingthis
ambition.Manufacturingreliesonserviceableinfrastructureandtransparenttraderules,andIndiaisdeficientin
both.
"Infrastructureinvestmentisvitalandthat'ssomethingModihaspromisedinordertoenticeinvestors,"addedPuri.
"Crucially,he[Modi]mustfollowthroughonhisbigGSTreform."
Revitalisingreforms
AsMarch'sBudgetlooms,Modiisunderpressuretodeliveronhisbiggestpromiseofall:areformonIndia's
notoriouslybureaucraticmultistateGSTlevies.Ifhesucceedsinpassingsuchcomprehensivenationaltax
legislationacrossallofIndia's29states,domestictradewillbenefitandforeigninvestorswillseethePrimeMinister
asamanofhisword.
"ChangesliketheGSTreformsneedtobeimplemented.Foreigninvestorsneedtobeconfidentthatthegovernment
won'tpulltherugfromunderthemanytimesoon."
TheanticipationsurroundingIndia'smakeorbreakyearwaspalpableinDavos,andPuriwasprivytosignificant
mediaattentionthroughouttheconference,conductinginterviewswithjournalistswhowantedtounderstandthe
situationinIndia:"Theywantedtoknowwhatiscurrentlyhappeninginthecountry,butalsohowit'saffectedby
Chinaslowing.
"Inrecentyearstheworldhashadfourmajorenginesofgrowth:China,Japan,EuropeandAmerica.Threeofthese
enginesareslowingandthere'sanopportunityforIndia,whichisrevvingup."

Enticingforeigninvestors
Thecombinationofastablerupee,easinginflationandlowerenergypriceswillbuoytheIndianeconomyinthe
comingmonthsandfortherealestateindustry,opportunityaboundsinthecurrentclimate.
IncreasedconfidenceinIndiaisdrivingdomesticbusinessdemand,particularlyinthetechnologysector,andoffice
takeupfromIndiancorporatesisrising,whichmeansrentalvaluesaregrowing.Thisisincontrasttothelastfouror
fiveyears,whichhavebeenmarkedbyexcesssupplyandlacklustregrowth.
ForeigninvestorsmaybefewandfarbetweenbuttheUS,India'sbiggesttradepartner,isfeedingitsservicehungry
economyonIndia'soutsourcingsector.TestimonytothecontinuedAmericaninterestinIndia,BarackObamabegan
astatevisitasPuritoucheddownfromDavos.
Ensuringthatallofthistranslatesintogrowthontheground,however,isanothermatter.
"ForeigninvestorswanttoseeModi'spoliciesinaction.Wewillseeinvestmentlevelscreepupoverthenextsixto
12monthsbutthemajorityofitwillcomethroughin2016."
IfModicanbringhisreformstofruition,2016willbetheyearinvestorsknockonJLLIndia'sdoor:"Fornow,the
foreigncommunityremainscautiouslyoptimisticandiswatchingIndiaveryclosely,toseehowtheModimania
unravelsitself.NextyearIdhopetoseeModimakeanappearanceatDavos,whichwouldsurelybeashotinthe
armforus.ItwillnotonlyaffirmIndiasnewpositionintheglobalpeckingorder,butalsohopefullyencourage
investors."

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