# 2 / 2024

Free trade agreement with India: a milestone for Swiss foreign trade

India – a sleeping giant has awoken

India's demographic dividend

As of April 2023, India has overtaken China as the world's most populous country with 1.428 billion inhabitants. This growth trend is set to continue for India in the coming decades: Its population will continue to rise – expected to reach around 1.7 billion inhabitants in 2064.

By way of comparison, China's population has currently peaked for the time being and is expected to fall drastically in the coming decades.

India's population is not only very large, but also very young: more than half of Indians are under the age of 30. This demographic dividend can be the basis for future economic growth. However, it is also a major challenge. India must reduce poverty before its population grows old.

India's economic outlook

Economic growth of between six and nine per cent is expected for India in the coming years. In addition to the demographic dividend (see above), there are two other reasons for this optimistic outlook: Firstly, India will invest massively in its own infrastructure in the coming years. Secondly, India wants to position itself as an attractive industrial location in the face of global competition.

India as a manufacturing location

  • India has been pursuing the «Make in India» under Prime Minister Narendra Modi for nine years. The aim of this initiative is to facilitate investment, promote innovation and expertise and expand the manufacturing industry. The aim is to overtake its great rival China, particularly in industrial production.
  • For geopolitical and strategic reasons, many companies want to reduce their dependence on China («China +1 strategy»). Accordingly, they are looking for an alternative production location in Asia, from which not only the Southeast Asian countries but also India is benefiting greatly.

India – the world's largest democracy

  • Switzerland has a great interest in maintaining and strengthening its relations with the world's largest democracy. Shared democratic values are important in times of increasing authoritarianism worldwide.