DAVOS, Switzerland — Along the Davos Promenade, attendees of the World Economic Forum stumble throughout the WeLead Lounge, a repurposed storefront showcasing India’s feminine management and expertise. There’s additionally the India Engagement Center, an area selling India’s development story, digital infrastructure, and its burgeoning startup ecosystem.

Elsewhere on the discussion board, Indian know-how and consulting giants Wipro, Infosys, Tata and HCLTech are out in full pressure to showcase the nation’s prowess in key applied sciences like synthetic intelligence, the subject that is on everybody’s lips.

The hefty Davos promotions come after India surpassed China final yr because the world’s largest nation by inhabitants. Now India is touting its rising power as a nation of innovation and as a worldwide enterprise hub in entrance of a few of the world’s richest and strongest individuals.

“India’s presence is certainly sizable — it has some of the most sought-after spots on the main promenade for tech companies,” Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, advised CNBC at Davos. “As China’s economy slows down, India’s relatively rapid growth stands out as a clear opportunity for investors in Davos looking for bright spots.”

China’s gross home product increased 5.2% final yr, up from 3% in 2022 however down from 8.1% the yr prior. India grew 7.2% within the final fiscal yr, down from simply over 9% a yr earlier.

India has been more and more trying to promote itself as a extra dominant determine on the world stage in relation to know-how and enterprise. States resembling Maharashtra, Tamil Nadu, Telangana, and Karnataka have their very own presence at Davos, positioning themselves as tech hubs for manufacturing and AI.

“In that sense, the separate state pavilions send a message — that various regions in India are competing with each other to offer global companies the best access,” stated Agrawal, who has been attending Davos for greater than a decade and is the creator of “India Connected,” which chronicles how the smartphone led to a extra linked and democratic India.

India nonetheless faces loads of challenges.

In most years, India sees extra individuals migrate overseas than into it, in response to date from the World Bank. In 2021, web migration topped 300,000. The rupee, in the meantime, has weakened closely versus the greenback, pressured by excessive U.S. rates of interest and risky oil costs.

One of the key risks of doing enterprise in India, in response to the International Trade Administration, is “price sensitivity” amongst shoppers and companies.

“The challenge, as always, is whether India can actually make it easier to do business there, and whether India’s domestic consumers can spend enough to make continued global investment worth it,” Agrawal stated.

Still, overseas direct funding has surged in the previous few years, growing from $36 billion in 2014, when Prime Minister Narendra Modi was first elected to workplace, to $70.9 billion in 2023, in response to figures compiled by digital media writer Visual Capitalist, which used Reserve Bank of India and S&P Global knowledge.

Dell, HP, Lenovo and different main producers are committing to creating their merchandise regionally in India as a part of the nation’s production-linked incentive scheme.

Apple is without doubt one of the largest examples of a U.S. firm that is regarded to divert its manufacturing from China and supply manufacturing from India to keep away from going through provide points with the iPhone and different key merchandise.

Last yr, Apple opened its first store in India, highlighting the significance of the market to the iPhone maker’s future. The retailer, referred to as Apple BKC, is within the populous metropolis of Mumbai.

“We had an all-time revenue record in India,” Apple CEO Tim Cook stated on the corporate’s newest earnings name in November, in response to an analyst’s query in regards to the firm’s momentum there. “It’s an incredibly exciting market for us and a major focus of ours. We have a low share in a large market. And so it would seem that there’s a lot of headroom.”

India can be making a big push to encourage investment from U.S. chipmakers. The nation hosted a significant semiconductor business occasion final yr, SemiconIndia, with chip producers from the U.S. invited to tout their investments in India and announce new ones.

AMD, which is chasing Nvidia within the AI chip market, stated it plans to take a position round $400 million in India over the following 5 years, together with a brand new campus in Bangalore that would be the firm’s largest design heart. And Micron introduced plans to take a position as much as $825 million towards establishing a semiconductor meeting and testing facility within the state of Gujarat.

Jack Hidary, CEO of SandboxAQ, which applies AI and quantum computing tech to areas like cybersecurity and drug discovery, stated India is seeing accelerating adoption of know-how because of inefficiencies in well being care and different core public companies.

AI, specifically, provides a possibility for India to face out from the pack, Hidary stated.

“This is a transformation that is well beyond even the mobile phone,” Hidary stated. After the U.S. and China began investing in cell infrastructure twenty years in the past, “almost everyone in those countries quickly got a smartphone and had access to the web and to apps,” he stated.

However, “600 million people in India out of the 1.3 billion still don’t have a smartphone,” he stated, including “that’s about to change.”

Hidary stated Indian billionaire Mukesh Ambani’s smartphone firm Jio will serve about 600 million individuals in India by a $12 device. Ambani, Asia’s richest particular person, can be in Davos for WEF.

“He and a few other services in India are going to close that digital gap literally in the next three years,” Hidary stated. Broadly, India is making a giant push on the occasion as a result of its leaders “know it’s a moment of great transformation,” Hidary stated.

During Modi’s tenure, main U.S. tech corporations, together with Alphabet, Meta, and Amazon have made huge bets on India. Amazon invested $2 billion into the nation in 2014, and one other $3 billion in 2016. Walmart acquired e-commerce firm Flipkart for $16 billion in 2018.

In 2020, Meta invested $5.7 billion in Jio, the digital arm of Ambani’s Reliance Industries. Google adopted up by pouring $4.5 billion into the corporate.

As India has ascended, China has confronted mounting trouble on the world stage, with the U.S. main a cost to isolate the world’s second-largest economic system notably in relation to accessing key know-how.

Beijing has for months been unable to import a few of the most superior chips from U.S. corporations resembling Nvidia, Intel, and AMD.

Ian Bremmer, president and founding father of Eurasia Group, advised CNBC that India has a great likelihood to strengthen additional due largely to being a democracy.

“The good thing about India is the fact that it’s a stable country, with a very popular leader,” Bremmer stated. “They’re about to have an election that’s going to be absolutely uncontroversial, and free and fair. And their growth is pretty strong.”

Bremmer contrasted India with the U.S., noting that it is a “very decentralized country,” with numerous states nearly competing towards one another for funding. He stated he might think about U.S. states ultimately taking an identical strategy.

“It’s not inconceivable to me that in five years time at Davos, you would see individual U.S. states deciding to do the same thing,” he stated. “Texas would be mopping up on fossil fuels and sustainable energy, if they had a storefront in Davos this year. And you know, California, frankly, would, too.”

— CNBC’s Arjun Kharpal contributed to this report

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