India's economy is considered to be one of the regions with the most potential and room for growth in the world. However, the recent horrific attack on India by US capital has led to major challenges for the Indian economy, possibly even setting back 20 years. The trigger for this crisis was the series of harvesting operations launched by US capital against Adani, India's richest man.
Adani, a self-made Indian billionaire, once had a fortune of about $10 billion in 2019 with his family's textile, diamond, import and export businesses. However, with the U.S. water release policy in 2020, Adani's wealth swelled rapidly, surpassing $150 billion in one fell swoop, making him the richest person in Asia and globally. The wolves of Wall Street in the United States smelled the smell of interest and poured into the Indian market.
However, the U.S. began to raise interest rates and reversed policy, and the Adani Group's financing was restricted. At this time, the American research institute Hindenburg released a short-selling report, revealing Adani's fraudulent behavior and other issues. Wall Street Capital concentrated on shorting Adani and made a lot of profits. With Adani's stock price** and scandal**, its wealth shrank to $50 billion, and its high-quality assets such as ports and coal mines were ceded by US capital at low prices.
This incident is reminiscent of a repetition of a similar episode. Recently, U.S. capital has withdrawn from India**, including well-known companies such as General Motors, Ford, Disney and Foxconn. This withdrawal of foreign capital has led to a massive loss of India's foreign exchange reserves. The rupee has depreciated by 12 per cent and India** has had to rely on further debt to stay on top of its finances. At present, India's debt ratio has reached 70% of the total GDP, and international institutions have warned that India is the country in the world that needs fiscal consolidation the most.
Whether India can survive this crisis depends on how thick the foundation it has accumulated over the past few years. While the United States harvests wealth through financial means, India has relied mainly on fines to start "harvesting" operations, such as fines for companies such as Xiaomi, OPPO, BMW, Vodafone, Carrefour, Nokia, Samsung, Amazon, and Google. However, as the Heavenly Dao Cycle says, this time it is India's turn. Many are worried about whether India will go back 20 years, as Japan did 20 years ago. While this is a bold idea, it is not impossible. After all, Japan was once the world's second-largest economy and an industrial powerhouse, and India has yet to industrialize, raising concerns about the future of the economic pie.
The withdrawal of American capital has not only made India's situation worse, but also has a more serious impact on India's overall economy. Not only that, but many U.S. companies have also quickly withdrawn from the Indian market, and this time the flip is faster than the flip of a book.
Well-known companies such as General Motors, Ford, and Disney were initially full of expectations for the Indian market and expressed their intention to increase investment in India. However, in the wave of US capital withdrawal, these companies have also changed their minds and chose to withdraw from the Indian market. Not only that, but Foxconn has also taken a hit in this trend, and the original plan to set up a factory in India has also been shelved.
This withdrawal of foreign capital has led to a massive loss of India's foreign exchange reserves, and the impact on the Indian economy has been enormous. The rupee depreciated by 12 per cent and India** was in financial trouble and had to increase its debt further. India's debt ratio is now as high as 70% of its total GDP, prompting international institutions to warn that India is one of the countries in the world that needs more fiscal consolidation.
The withdrawal of American capital has also brought about a series of other ripple effects. The struggling situation of the Indian economy has led to a rise in unemployment, layoffs and closures of businesses. In addition, the decline in consumer confidence has also led to a contraction of consumption and a sharp decline in market demand, which in turn has had an irreversible impact on the entire ** chain.
It is important to note that the withdrawal of US capital is not simply an economic decision. The strategic intention behind this is that the United States wants to put pressure on India in this way to force India to accept American conditions and benefits. This kind of behavior not only has a profound impact on the Indian economy, but also poses a huge challenge to India's political and social stability.
The uncertainties and challenges facing the Indian economy are unprecedented. In recent years, India has been considered one of the fastest growing regions in the world, and its huge market potential has attracted the attention of countless foreign investors. However, the withdrawal of US capital and the intensification of economic distress have brought a huge shock to the Indian economy.
First of all, the withdrawal of foreign capital has led to a significant loss of India's foreign exchange reserves, which in turn has affected India's currency market. The sharp depreciation of the rupee has reduced the purchasing power of the Indian people and has also adversely affected India's imports and exports**. At the same time, India** has had to rely on debt to maintain its finances, which has led to a further rise in the country's debt.
Secondly, the sluggish job market is also an important issue for the Indian economy. With layoffs and closures of businesses, the unemployment rate has risen rapidly, which has dealt a huge blow to India's huge labor market. The rise in unemployment has further weakened consumer confidence, leading to a decline in consumption. This is a heavy blow to a country dominated by domestic demand.
In addition, India's infrastructure development is also facing huge challenges. India has always had a huge shortage of infrastructure construction, which has greatly limited the development potential and competitiveness of the Indian economy. However, due to the shortage of funds and the withdrawal of foreign capital, India's infrastructure construction has also been severely affected. This makes it more difficult for India to meet future economic challenges.
Despite India's enormous economic woes, we cannot ignore India's potential and opportunities. India's huge market and young labor pool are important advantages for its development. India** is also actively promoting economic reforms and increasing investment to attract more foreign capital to the Indian market. By diversifying the economic structure, improving the level of infrastructure construction, improving the business environment and regulation, India is still expected to get out of the current economic woes and achieve sustainable development.
Although the US action has had a great impact on the Indian economy, we should also note that this is not an individual US action against India, but a part of the adjustment of the global economic pattern. In the context of globalization and fierce international economic competition, economic contradictions and wrestling between countries are inevitable. As a developing country, India needs to address these challenges more cautiously and strategically in order to achieve its own economic independence and sustainable development.