Economist who predicted 2008 crash says India must grow faster to create jobs

Economist Nouriel Roubini, known as “Dr Doom” for predicting the 2008 global financial crisis, believes India could emerge as one of the biggest economic success stories over the coming decades. But he has warned that the country needs to raise its growth rate closer to 9% to create enough jobs for its young workforce.In an interview with The Economic Times, Roubini said India was a “major success story with the potential to become an even bigger one”. He pointed to the country's large domestic market, talent pool, macroeconomic fundamentals and efforts to open up its economy as factors supporting its long-term outlook.“Growth of 7% is not enough. India needs to get closer to 9% to ensure that young people can secure good jobs,” he said.His warning comes as artificial intelligence reshapes employment across both manual and knowledge-based occupations, making job creation a central challenge for India's growth story. WHY INDIA COULD GAIN FROM GLOBAL TRADE SHIFTSRoubini believes changing global supply chains could give India an opportunity to attract more investment as companies diversify manufacturing beyond China.“Geopolitics benefits India because China is increasingly considered risky,” he told The Economic Times, pointing to the potential for nearshoring and friendshoring to encourage businesses to spread production across more countries. India's large domestic market could help it attract manufacturers looking for alternatives to China. Electronics, automobiles and semiconductor-related industries are among the sectors where companies are seeking additional production capacity.He also argued that closer trade ties with the US could strengthen India's prospects. Roubini expects American tariffs to fall further as inflation and affordability concerns put pressure on US policymakers.“Markets will force the US to adopt a more constructive approach, including towards India,” he said.The first phase of the India-US trade agreement had been finalised and was undergoing legal drafting at the time of the interview. The framework announced in February had reduced US tariffs on most Indian goods from 50% to 18%, while India was seeking better market access to compete with exporters from Vietnam, Bangladesh and Indonesia.AI MAKES JOB CREATION MORE URGENTRoubini warned that India's demographic advantage would not automatically translate into economic gains if the country failed to create enough jobs.AI could reshape employment across a wide range of occupations, making it harder to rely on population growth alone as a source of economic strength.Manufacturing could play an important role by generating jobs across factories, logistics and supplier networks, beyond the highly skilled positions concentrated in technology and professional services. Electronics, automobiles and textiles could help expand employment while improving productivity.Roubini said continued reforms could push India's potential growth above 8%. Achieving growth closer to 9%, however, would be important to provide enough good jobs for the millions of young people entering the workforce.WHY HE IS CALLED 'DR DOOM'Roubini earned the nickname after warning in 2006 that weaknesses in the US financial system, including risky mortgage lending and high household debt, could trigger a major crisis.The housing market collapse in 2008 led to widespread financial turmoil and a global recession, giving his warning prominence.His latest assessment is more optimistic. He sees India as a potential major beneficiary of shifting trade relationships and global manufacturing, although he argues that the country must accelerate growth and employment to realise that opportunity.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends