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Indian economy surpasses that of United Kingdom, for the first time in 150 years; becomes fifth largest GDP in world

The Gap In Economic Growth Is Likely To Widen As Indian Economy Is Growing At 6-8% Per Year. UK's Economic Growth Is Expected At 1-2% Per Year Until 2020.

News Nation Bureau | Edited By : Kanishk Sharma | Updated on: 21 Dec 2016, 02:27:55 PM
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New Delhi:

India has overtaken its erstwhile colonial master United Kingdom in terms of the size of the economy — the first time after nearly 150 years, according to a report in Forbes magazine. 

With this major shift in world economy, India has now become the fifth largest country in terms of the size of the economy after the United States, China, Japan and Germany. 

The recent development took place because of India’s continuous economic growth in the last two decades as well as Britain's recent economic issues after the Brexit decision in the last one year. 

According to the Forbes report, the major overtake was expected in 2020, but the almost 20% drop in the value of the pound in the last one year made it possible in 2017.

Read | India remains one of the fastest-growing countries in world; private consumption major driver of economic growth: WH 

The gap in economic growth is likely to widen as Indian economy is growing at 6-8% per year. UK's economic growth is expected at 1-2% per year until 2020.

"India overtakes UK & becomes 5th largest GDP after USA, China, Japan & Germany. India may have large population base but this is a big leap," tweeted Kiren Rijiju, Minister of State for Home Affairs.

India-UK ties under May, Modi

Britain's historic vote in 2016 favouring an exit from the EU was a political upheaval of seismic proportions as it led to a leadership change which brought to power a woman Prime Minister whose first bilateral visit outside Europe to India signalled the depth in ties.

Theresa May's choice of India for the trip after assuming office following the June 23 referendum sent a positive message but her government's recent crackdown on student and professional visas can hardly be called India-friendly.

'Brexit' also emerged as the word of the year due to the massive projected repercussions of the 
June 23 referendum, with the shock defeat forcing David Cameron to step down and triggering a bloodbath in world markets besides opening a fresh debate over issues like immigration and advance of the right-wing across Europe.

The early indications for Indo-UK ties seemed positive as there was widespread excitement over the prospect of a free trade agreement between India and Britain -- one of the EU's big three economies, freed from the perceived shackles of its membership of the 28-nation economic bloc after four decades.

"As we leave the EU, we will forge our own trade deals. The leaders from India, Mexico, South Korea and Singapore said they would welcome talks to remove trade barriers," the new Prime Minister told the House of Commons in September.

She then followed up on this promise during her November visit to India which came under very different circumstances than the other high-profile UK visit in April by Prince William and wife Kate - the Duke and Duchess of Cambridge.

Her visit also came nearly a year after Prime Minister Narendra Modi's maiden visit to the UK - the first by an Indian premier to the country in nearly a decade.

Ahead of the visit, May said she would use this visit to "reaffirm the importance of the strategic partnership we already have, which delivers huge benefits for both our countries, and to work with Prime Minister Modi to agree to concrete steps to realise our shared vision of going even further in our cooperation across trade, investment, defence and security".

However, this message was somewhat overshadowed by her government's wider efforts to curb immigration into the UK, with a crackdown on student and professional visas expected to hit Indians the hardest.

Modi was candid in his message as he opened the UK-India Tech Summit in New Delhi alongside May: "Education is vital for our students and will define our engagement in a shared future. We must, therefore, encourage greater mobility and participation of young people in educational and research opportunities."

Within days, tougher new rules announced on 
November 24 by the UK Home Office for the Tier 2 intra-company transfer (ICT) category, raising the salary threshold requirement to 30,000 pounds, came into force. 

With Indian IT workers accounting for nearly 90 per cent of visas issued under this route, the tightening of this visa category as well as an expected halving of the number of student visas issued to non-EU applicants, including Indians, is unlikely to be seen as very India-friendly.

However, during her visit, May said there were "more opportunities for Britain and India and a clear message that Britain is very much open for business".

(With PTI inputs)

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First Published : 20 Dec 2016, 01:49:00 PM

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