Growing economy: India to overtake US, Japan

Emerging economies, including India, will overtake the developed countries in growth by 2050, with popularity of India and China as investment destination rising while the attractiveness of Europe and North America slipping, says a study.

"The seven new global powers by 2050 will comprise the so-called BRIC economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey," says the Ernst and Young European Attractiveness Survey 2007.

These seven emerging countries would overtake the economies of the G7 countries — Britain, Canada, France, Germany, Italy, Japan, US — in terms of GDP but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added.

The developing economies will outdo the G7 if it manages to mend the loopholes regarding transparency, fairness and infrastructure development. India's popularity is rising as 26% respondents said the country is amongst their top three preferences in 2007 whereas the figure was just 11% in 2004.

The survey highlights that with intensifying competitive cost pressure; companies across the world would resort to offshore services and manufacturing to lower cost and higher growth economies such as China and India. One company in five intends to relocate all or part of its European activities outside the region and for this they look forward to the Asian countries.

"China attracts interest of 50% of respondents undergoing a relocation search, while India is considered by 30% of voters," the survey said.

Europe's attractiveness for foreign investors declined significantly in 2007, though it has managed to maintain its lead as the most attractive global investment region, the survey says. However, the survey cautions that the mature economic markets in Europe are losing hold on investors as emerging economies of Asia gain momentum. This change in foreign investor interest towards Asian countries is because of high skilled labour power cost effectiveness and good ground for research and development (R&D) activities.

Asia has shown a significant gain and narrowed the gap with Europe and in the list of preferred regions China has moved up to the second position this year, while India has attained fifth position in the league. Western Europe tops the chart with 55% respondents naming it as one of their most preferred business locations followed by China.

Should india wait till 2050....? please write you comments...!!!