Indian economy reflects new order

India is forecasting that its economy will expand 8.5 per cent over the year, in part on the back of exceptionally strong growth this quarter.

This is good news for the Gulf region and the international economy. For the Gulf, the obvious benefit is the likely increased demand for oil, the major export from the region. However, the dramatic surge in India's growth — especially remarkable given the weak state of the global economy — will also result in increased commerce between the sub-continent and the rest of the world. For international trading and financial centres, like the UAE, this will provide a boost to the local economy.

The emergence of India and other developing countries as new centres of economic power has been one of the significant developments in the international financial system in recent years. China has just overtaken Japan to become the world's second largest economy, by some measure.

While the United States remains the world's dominant economy, the emergence of other countries, as both producers and consumers of goods and services, has offered international trade and financial services some protection from the recession in North America and Europe. India's latest growth figures confirms the change in the world economic order.