New Delhi/London
CNN
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In The world's largest democratic election will begin in India in just a few days.
An estimated 960 million people in a country of 1.4 billion people are eligible to vote in elections that begin Friday and will last more than a month. Narendra Modi is widely expected to win his rare third consecutive five-year term as prime minister.
Under his leadership, India is on track to become a 21st-century economic powerhouse, providing a viable alternative to China for investors and consumer brands seeking growth, as well as manufacturers looking to reduce risks in their supply chains.
While relations between Beijing and the West continue to weaken, India maintains good relations with most major economies and is aggressively courting major companies to set up factories in the country.
Is the hype surrounding Modi's India, still a largely impoverished country, justified?
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Workers work on part of the Coastal Road expressway along Mumbai's coast.
The quality of economic data in India can be unreliable, making it difficult to assess the reality on the ground in the world's most populous country.
But using data from official or authoritative sources, CNN has created five charts to show how the country has performed since Modi first came to power in 2014 and to look at the challenges facing the next leader will face in leading the world's fastest-growing major economy.
India's economy was worth $3.7 trillion in 2023, making it the fifth-largest in the world, having climbed four places in the rankings during Modi's decade in office.
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The South Asian giant's economy is well-positioned to grow at an annual rate of at least 6% in the coming years, but analysts expect it should The country is aiming for growth of 8% or more if it wants to become an economic superpower.
Continued expansion will push India further up the rankings of the world's largest economies. Some observers predict that by 2027 the country will be number three behind the US and China.
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A construction worker carries metal rods during the construction of a flood tank in Ajmer, Rajasthan, January 30, 2024.
However, India could do much more to increase its gross domestic product (GDP) per person, a measure of living standards that ranks the country low 147 in 2022, according to the World Bank.
According to Guido Cozzi, a professor of macroeconomics at the University of St. Gallen in Switzerland, as the economy grows there will be “trickle-down effects on GDP per capita.” However, he warned that “trickle-down economics is not guaranteed to reduce income inequality and that measures to promote inclusive growth may be needed.”
Even China did this more than three decades ago, and India is embarking on a massive infrastructure transformation, spending billions building roads, ports, airports and railways. Meanwhile, private investors are building the world's largest green power plant.
In this year's federal government The budget alone allocated $134 billion for investments to stimulate economic expansion.
The results can be seen on the ground as there is heavy construction going on across the country. India expanded the national highway network by nearly 55,000 kilometers (around 35,000 miles) between 2014 and 2023, representing a 60% increase in total length. Infrastructure development has many benefits to the economy, including job creation and improving the ease of doing business.
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In recent years, the country has also built a number of technology platforms – so-called digital public infrastructures – that have been transformative Life and business.
For example, the Aadhaar program, launched in 2009, provided millions of Indians with proof of identity for the first time ever. The world's largest biometric database has also helped the government save millions by reducing corruption in welfare initiatives.
Another platform, the Unified Payments Interface (UPI), allows users to make payments instantly by scanning a QR code. It was embraced by Indians from all walks of life, from coffee shop owners to beggars, and enabled the inflow of millions of dollars into the formal economy.
In September 2023, citing a World Bank report, Modi said that thanks to its digital public infrastructure, India “has achieved financial inclusion goals in just six years, which would otherwise have taken at least 47 long years.”
Excitement about India's growth potential is reflected in its stock market, which has reached record highs. The value of companies listed on Indian stock exchanges exceeded $4 trillion at the end of last year.
India has two major stock exchanges: the National Stock Exchange of India (NSE) and the BSE, Asia's oldest stock exchange, formerly known as the Bombay Stock Exchange.
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Thanks to them sizzling With the rally, the NSE has overtaken both the Shenzhen Stock Exchange and the Hong Kong Exchange to become the world's sixth-largest bourse, data from the World Federation of Exchanges showed in January.
Domestic investors, both retail and institutional, have driven the Indian stock market to unprecedented highs.
According to Macquarie Capital, retail investors alone own 9% of India's stock market value, while foreign investors account for a little less than 20%. However, analysts expect foreign investment to pick up in the second half of 2024 once the elections are over.
The Modi government is aggressively trying to capitalize on the massive shift in corporate thinking about supply chains. International firms are looking to diversify their operations away from China, where they have faced obstacles during the pandemic and are threatened by rising tensions between Beijing and Washington.
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A signboard with the property information of Foxconn India's manufacturing unit in a special economic zone in Sriperumbudur, on the outskirts of Chennai. on December 28, 2021.
Asia's third-largest economy has launched a $26 billion manufacturing incentive program to encourage companies to set up production in 14 sectors ranging from electronics and automobiles to pharmaceuticals and medical devices.
As a result, some of the world's largest companies, including Apple (A`L) supplier Foxconn, are significantly expanding their operations in India.
Billionaire Elon Musk said on X last week that he was “looking forward to meeting Modi in India,” without giving a date. Tesla's (TSLA) boss is expected to announce a major investment in India soon, with the automaker reportedly scouring the country for a suitable location for its first Asian factory outside of China.
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Until two years ago, Apple typically only began assembling models in the country seven to eight months after launch. That changed in September 2022, when Apple began producing new iPhone 14 devices weeks after they went on sale in India.
Analysts are calling the strategy shift a big win for Modi as growing manufacturing ties with a US giant like Apple will in turn attract other global players in the electronics manufacturing ecosystem to India.
Up to 23% of iPhones will be manufactured in India by the end of 2025, up from 6% in 2022, according to market research firm Canalys.
Yet India's economy, like its democracy, is far from perfect. If re-elected, Modi will face the enormous challenge of creating hundreds of millions of jobs for a population that remains largely impoverished.
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Commuters at Churchgate railway station in Mumbai
With a median age of 29, India has one of the youngest populations in the world, but the country is not yet ready to capitalize on the potential economic benefits of its large, young population.
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Educated Indians between the ages of 15 and 29 are more likely to be unemployed than uneducated people, according to a report last month by the International Labor Organization “a mismatch with their ambitions and available jobs.”
The youth unemployment rate in India is now higher than worldwide, it said.
The unemployment rate for young college-educated Indians was over 29%, almost nine times higher than that of those who cannot read or write, the report said.
“The Indian economy has been unable to create enough lucrative jobs in the non-agricultural sectors for new, educated young workers, which is reflected in the high and rising unemployment rate,” it added.
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