India's exports to China will grow by around 14% a year in the decade to 2030, outpacing export growth to any other country, as per HSBC Trade Forecast. Exports will also penetrate new markets further such as Brazil, where exports from India are expected to rise by 10% a year in the decade to 2030, it said.

'Having low relative unit labour costs compared to other countries (both emerging markets and advanced economies), India will be competitive in the international market.'

In the decade to 2030, more advanced sectors such as transport equipment are expected to emerge as the top contributors to exports, as India improves the development of its manufacturing sector. Other important sectors that are likely to gain importance include industrial machinery and pharmaceuticals. At the same time, Petroleum products which are currently India's top exports, will contribute almost 20% of growth in total merchandise exports in 2015-20, HSBC said.

'The near-term outlook for India is upbeat. Being a net oil importer, India has benefitted from the fall in global oil prices and the positive impact of this will continue through in the coming years. The current account deficit is expected to narrow from 1.1% of GDP in 2014 to 0.6% in 2015, while inflation is likely to remain below 6%-the central bank's inflation target for January 2016 - throughout this year,' HSBC added.

HSBC said, 'The RBI has begun the monetary loosening cycle, lowering interest rates by a cumulative 50bp since January. These positive developments will support the economy and GDP growth is expected to accelerate from 7.4% in 2014 to 7.8% in 2015 and 8.3% in 2016.

However, progress on reform has been relatively slow. The World Bank's 'Doing Business' report ranks India 126 out of 189 economies on the ease of trading across borders, and even lower at 142 on the overall ease of doing business. As such, GDP growth is likely to moderate beyond 2016, although it will still average a fairly robust 5.6% a year in the decade to 2030.'

Sandeep Uppal, managing director and head, Commercial Banking, HSBC India said, 'The economic potential for India remains strong, with the growing population and rapidly expanding middle class -it presents opportunities for business. With the government’s thrust on Manufacturing in India, export of value-added goods like transport equipment, industrial machinery and pharmaceuticals is expected to grow.'

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