All India plans to climb the ranking of world economies
From Air India's super order of 500 between Boeing and Airbus for a value of 100 billion dollars to the PLIS program to increase industrial production and exports, passing through the arrival of Apple in the country, here's how India wants to break through .
By placing a record order of 500 Boeing and Airbus aircraft worth an estimated $100 billion, Air India is leaping into competition to become the leader in international and regional routes, reflecting the ambitions of a country which, in addition to soon becoming the most populous in the world, will climb the ranking of world economies overtaking Japan and Germany within a few years.
THE AGREEMENT
To give us news of the mega agreement that the company in the hands of the Tata Group is about to sign is Reuters , which has heard from some industrial sources.
According to news agency sources, the order includes 500 jets, including 100 large jets, including dozens of Airbus A350s and Boeing 787s and 777s. The earmarked sum could exceed $100 billion at list prices and represents the largest deal ever made in terms of financial volume by a single airline, surpassing even that made a decade ago by American Airlines when it bought 460 between Boeing and Airbus.
THE STRATEGY
Air India's maxi order reflects a well-defined strategy which plans to recapture a large share of the trips made by the huge Indian diaspora to cities such as Delhi and Mumbai, which are currently dominated by foreign rivals such as Emirates.
But the goal is also to become a leader in internal and regional traffic by taking market share away from the current number one which is IndiGo.
THE MERGER WITH VISTARA
It is also to achieve these goals that Tata, Reuters informs us again, at the end of November announced the merger of Air India with Vistara, a joint venture with Singapore Airlines, with the aim of becoming an even larger and more competitive carrier capable to strengthen its presence in domestic and international skies.
The merger brought Air India a fleet of 218 aircraft, cementing its position as India's leading international airline and the second largest after IndiGo in the domestic market.
As Reuters points out, the 500 jets being ordered by Air India, which will not be delivered before the next decade, are functional to Indian Prime Minister Modi's strategy to expand the national economy until it reaches the $5 trillion ceiling.
RECORD GROWTH FOR INDIA
According to estimates by S&P Global and Morgan Stanley reported by CNBC , India is on the verge of becoming the third largest economy on the planet, overtaking those of Japan and Germany.
Morgan Stanley's forecast, in particular, is that India's GDP in 2031 will more than double compared to current levels; and this thanks to an annual growth of the gross national product which should maintain an average of 6.3%.
As Morgan Stanley analysts Ridham Desai and Girish Acchipalia write, India's imminent economic boom will be fueled by a combination of factors that combine "offshoring, investment in manufacturing, the energy transition and the country's advanced digital infrastructure".
OBJECTIVE: TO BECOME A MANUFACTURING HUB – THE PLIS PROGRAM
As CNBC observes, the strategy of the Indian government of Narendra Modi is to make India an industrial giant and a hub for foreign investment.
The cornerstone of this strategy is the PLIS (Production Linked Incentive Scheme) program which, launched by the executive in 2020, aims to increase industrial production and exports through tax incentives for both domestic and foreign companies.
As an effect of the PLIS programme, Morgan Stanley estimates that the share of manufacturing in India's total GDP will rise from the current 15.6% to 21% in 2031. Such growth corresponds to an increase in Indian manufacturing business from the current 447 billion dollars to a whopping 1,490.
APPLE'S INDIAN STRATEGY
There is perhaps no better proof of India's manufacturing dynamism than Apple's products arriving in the country.
It was the Wall Street Journal , a few months ago, that reported how the Cupertino giant was planning to take its production out of China and reduce its dependence on Taiwanese assemblers led by Foxconn Technology, moving them to other Asian countries, including the main candidates were precisely India together with Vietnam.
Since then it has been a succession of news that confirmed Apple's Indian strategy. A few weeks ago confirmation arrived that Apple – which has already been producing the oldest iPhone models in India since 2017 – will assemble its latest model, namely the iPhone 14, precisely in the subcontinent, as reported by CNBC .
And it is always CNBC to inform us that Apple is now having talks with the Indian government with the aim of moving the production of the iPad out of China.
Finally, a very recent indiscretion from Mint reports that Apple intends to triple the production of iPhones assembled in India over the next two years.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tutti-i-piani-dellindia-per-scalare-la-classifica-delle-economie-mondiali/ on Tue, 13 Dec 2022 08:08:53 +0000.