Morgan Stanley, the US investment banking giant said that India, under Prime Minister Narendra Modi’s leadership, has significantly evolved since 2014, gaining a stronger global position and becoming an essential driver for Asian and global growth.

What Happened? The report highlights that scepticism from overseas investors fails to consider the substantial transformations India has undergone, particularly since 2014.

According to Morgan Stanley, India’s current standing is far different from its position in 2013. Within a decade, the country has achieved significant strides in the world order, resulting in positive consequences for the economic and market outlook.

In its report titled “India Equity Strategy and Economics: How India Has Transformed in Less than a Decade,” Morgan Stanley listed ten significant changes since PM Modi’s administration began in 2014. These include policy reforms, economy formalisation, digital social transfers, and a focus on Foreign Direct Investment (FDI).

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The report identifies key transformations such as the introduction of the Goods and Services Tax (GST), the rise of digital transactions, and corporate tax reform as integral to India’s economic revolution.

Other substantial changes include the Flexible Inflation Targeting adoption, resulting in lower inflation rates compared to the high-inflation period of 2009-14, primarily due to relaxed monetary and fiscal policy.

Despite pandemic-induced global crises, India has effectively managed inflation and reduced its reliance on foreign portfolios and global capital flows, leading to a more resilient economy.

However, the report also noted potential risks, including a global recession, a fragmented 2024 general election outcome, a sharp rise in commodity prices, and a shortage of skilled labour supply.

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