Aligned with the priorities of the government, private-sector development is also key for ADB. In fact, India is the largest country for ADB’s private sector operations. At the end of 2022, ADB’s private sector portfolio in India was $2.84 billion, representing 22.2% of our total private sector portfolio.

ADB is also supporting India’s commitment to climate action. In May, we launched the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), an innovative and transformative approach to mobilising finance to meet development and climate goals. IF-CAP allows donors to guarantee existing sovereign loans on ADB’s balance sheet for the explicit purpose of freeing capital to invest in new climate projects in developing member countries (DMCs), including India.

To spur growth and structural transformation, ADB during 2023-2027 will help India promote integrated urban development underpinned by improved logistics, industrial development, and skill upgrades.  Also, we aim to help the government deepen social and economic inclusiveness so that growth benefits are shared by everyone. While strengthening human development, agriculture, and rural development, ADB will remain focused on basic urban services, prioritizing low-income states and districts.

With the emergence of new development banks like the Asian Infrastructure Investment Bank and the BRICS New Development Bank, how do you think the role of ADB will be impacted?

The emergence of new development partners can only be a positive. Financing needs for Asia and the Pacific over the coming decade amount to trillions of dollars. Even when combined, the balance sheets of all development banks still only provide a small portion of these needs. Strong coordination between various development partners is critical to ensure the diverse needs of our clients are being efficiently met. This can help ensure that the support from our different organizations adds up to more than the sum of its parts. As part of the ongoing review of ADB’s Strategy 2030, we are speaking directly to both existing and new development partners, to ensure that ADB is ready to play its part in this collective effort.

Any reassessment of India’s economic prospects in FY24 in the light of the slowing of global growth, China stagnation/deflation and the persisting doubts about a soft landing of the US economy?

ADB expects India’s economy to achieve a growth rate of 6.4% in the current fiscal year and a projected 6.7% the following year. This positions India among the fastest-growing economies in the region.

The government’s early focus on capital expenditure has provided valuable support to India’s economic prospects. Notably, domestic private sector demand remains robust. However, export demand has encountered some headwinds due to decelerating global trade, particularly in advanced economies. India’s services sector has demonstrated remarkable competitiveness, which has acted as a buffer against the global economic slowdown.

My optimism is reinforced by the pivotal role that private investments are poised to play in driving India’s medium-term growth. The government’s infrastructure investments, complemented by its focus on fiscal consolidation and business-oriented reforms to reduce compliance burdens on enterprises, have enhanced the climate for private investments.