Balancing Climate Change and Economic Growth in India
By Kangkyu Lee
On November 2nd, the International Panel on Climate Change (IPCC) released a report to the United Nations indicating that India is one of the most vulnerable countries to the effects of climate change. The conclusions are the same as the study conducted in 2007: climate change remains irreversible and the continued use of fossil fuels will have a massive impact on the world.
Since India is one of the top 20 nations at risk from extreme impacts of climate change, the panel recommended India internalize its development strategy with energy efficiency and reduce greenhouse-gas emissions (GHG). While this appears to impugn on Prime Minister Narendra Modi’s economic advocacies, there are ample opportunities to take advantage of.
India is a nation well-accoutered to tackle the climate change problem and still economically develop. Modi has recently freed diesel prices from control of the state and signed an executive order that will open India’s coal industry to private companies both domestically and internationally. This comes in tandem with dipping global oil prices in order to attract potential buyers to one of India’s most expensive subsidies. In addition, the US-India partnership on nuclear power is a valuable connection structured to better relations between the two and get India on track in reducing greenhouse-gas emissions.
Plans to roll out nuclear power in India may be implemented by 2020. The prime minister also plans to invest more in renewable energy (particularly solar) and fix the unreliability of India’s energy sector. The need to do so is now particularly pressing, with scientists recently finding that India’s yields of crops are being cut by almost half due to its air pollution levels.
The “Make in India” campaign and Modi’s international visits have focused on attracting foreign investors to the energy sector. Decarbonizing the world is a daunting task but, at least for India, there is a litany of different options to take. Foreign investors need not worry about collateral damage from any change in development strategies: experts on the IPCC have stated that energy transition in India would have minimal impact on the country’s economy and it is possible to safely incubate the renewable energy industry.
The IMF has forecasted that India will become a US $2 trillion economy this year, and will surpass the US $3 trillion boundary by 2019. Even in the face of climate change, India is scientifically and economically equipped to handle the challenges of global warming whilst opening up new avenues for investors to take advantage of. Indeed, India has the potential to be a model nation that combines renewable energy and sustainable economic development.
With Modi’s initiatives, India is an alluring business and investment location and many should feel comfortable with its emerging markets and industries. Even now there are signs of salient economic recovery, with credit ratings firm Moody’s declaring that it may improve its rating of India in the near future. There are also forecasts that India will soon surpass China as the wealthiest BRIC nation.
In the face of the challenges that climate changes poses, foreign investors can therefore still be confident in India’s repertoire of unique advantages and imminent reforms.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Taking Advantage of India’s FDI Reforms In this edition of India Briefing Magazine, we explore important amendments to India’s foreign investment policy and outline various options for business establishment, including the creation of wholly owned subsidiaries in sectors that permit 100 percent foreign direct investment. We additionally explore several taxes that apply to wholly owned subsidiary companies, and provide an outlook for what investors can expect to see in India this year.
Passage to India: Selling to India’s Consumer Market In this issue of India Briefing Magazine, we outline the fundamentals of India’s import policies and procedures, as well as provide an introduction to the essentials of engaging in direct and indirect export, acquiring an Indian company, selling to the government and establishing a local presence in the form of a liaison office, branch office, or wholly owned subsidiary. We conclude by taking a closer look at the strategic potential of joint ventures and the advantages they can provide companies at all stages of market entry and expansion.
Trading with India In this issue of India Briefing, we focus on the dynamics driving India as a global trading hub. Within the magazine, you will find tips for buying and selling in India from overseas, as well as how to set up a trading company in the country.
- Previous Article India Challenges China with Border Road
- Next Article India Deepens Bilateral Cooperation with Israel