08-Oct-2013
India will surpass the US as the biggest importer of goods needed for infrastructure projects by 2020, according to the latest trade forecast report released by Hongkong and Shanghai Banking Corp. Ltd (HSBC) on Tuesday.
India will continue to hold this position till 2030, as it builds civil infrastructure, bolstering demand for overseas goods, the report said. China is set to become the top importer of investment equipment (machinery required by businesses to boost production) by 2030 as it continues to invest in manufacturing productivity.
India is not featured in the top five list of largest exporters of infrastructure-related goods forecast in 2013, according to the report. China tops this list followed by the UAE, the US and Germany. However, according to the report, India is set to become the third-largest exporter of infrastructure-related goods by 2030 pushing the US to fourth place.
“Rising middle classes across Asia’s rapidly emerging markets, especially India and China, will drive significant infrastructure demand in the region. Aspirations of the new middle class and rapid urbanization will force India to upgrade its civil infrastructure, thus pushing up demand for overseas infrastructure-related goods,” said Sandeep Uppal, managing director and head of commercial banking at HSBC India.
Growing Asian economies will take an increasing share of infrastructure-related imports over time, with Malaysia, Korea and Vietnam moving up the rankings, the report said. Excluding the US, Mexico is the highest ranking non-Asian importer of total infrastructure goods, ahead of Brazil.
The report said that trade in investment equipment will increase more rapidly than trade in goods for infrastructure in the years to 2030, in part due to the pivot in China’s economic focus towards consumer-led growth and next generation technology.
“Asia is forecast to see the most rapid growth in merchandise trade in the decade to 2030 led by India, China and Vietnam at an average of more than 10% a year. Yet advanced European economies—such as the UK, France and Germany—are also forecast to expand their exports of goods at rates of 4-5% a year on average over this period, while average growth in US goods exports will be closer to 6%,” it said.
India has said it needs to invest Rs.1 trillion over the next five years in its decrepit infrastructure, which is seen as a drag on economic growth, and is looking to the private sector to share the burden.
The Indian economy grew at its slowest quarterly pace in four years at 4.4% in the three months ended 30 June, compared with 4.8% in the preceding quarter, belying hopes of the economy having bottomed out.
Source:- livemint.com
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