New Delhi: Exports to China are expected to grow by around 14 percent a year in the decade to 2030, potentially outpacing outbound shipment growth to any other country, said an HSBC trade forecast report.
Not just that, the report added, exports will head for newer markets, including Brazil, where the shipments from India are expected to grow by 10 percent a year in the said period.
"The near-term outlook for India is upbeat," the HSBC report said, adding that "having low relative unit labour costs compared with other countries (both emerging markets and advanced economies), India will be competitive in the international market".
Being a net oil importer, India has benefited from the fall in global oil prices, and the positive impact of this is likely to continue in coming years as well, the report predicted.
"The economic potential for India remains strong, with the growing population and a rapidly expanding middle class - it presents opportunities for business," HSBC India Managing Director and Head, Commercial Banking, Sandeep Uppal said.
According to HSBC, India's current account deficit is expected to narrow from 1.1 percent of GDP in 2014 to 0.6 percent in 2015 while retail inflation is likely to remain below 6 percent throughout this year.
RBI has begun the monetary loosening cycle, lowering interest rates by a cumulative 50 basis points since January.
"These positive developments will support the economy and GDP growth is expected to accelerate from 7.4 percent in 2014 to 7.8 percent in 2015 and 8.3 percent in 2016," HSBC said.
The report, however, noted that progress on reforms has been relatively slow.
The World Bank's 'Doing Business' report ranks India 126 out of 189 economies on the ease of trading across borders, and even lower at 142 on the overall ease of doing business.
According to the report, in the decade to 2030, more advanced sectors such as transport equipment are expected to emerge as the top contributors to exports. Other important ones that are likely to gain importance include industrial machinery and pharmaceuticals.
"With the government's thrust on manufacturing in India, export of value-added goods like transport equipment, industrial machinery and pharmaceuticals is expected to grow," Uppal added.