Morgan Stanley’s chief Asia economist, Chetan Ahya, stated that India is not expected to achieve the high economic growth rates of 8%-10% that China has seen over the long term. Instead, India’s economy is likely to grow steadily at 6.5%-7%, and it is not poised to replace China as a global manufacturing hub.
This assessment aligns with India’s current challenges of insufficient infrastructure and a workforce with low skills according to Ahya. Despite these constraints,
Morgan Stanley remains hopeful about India’s prospects, comparing the current economic expansion to the boom seen in the mid-2000s. The investment bank cited a report indicating that India’s growth trajectory now resembles that of 2003-07, with rising investments playing a key role in driving growth.
The report highlights a shift towards more capex as a growth driver, noting that public capex has been leading the way due to challenges faced by the corporate sector in recent years.
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