India showcases its potential at Davos as the world's largest population seeks to attract investors.

• Re-purposed storefronts on the main Promenade street of Davos, which were once Indian lounges, now focus on female leadership and empowerment as well as digital infrastructure.
• The Indian states of Maharashtra, Tamil Nadu, and Telangana have been boasting about their status as tech hubs for manufacturing and artificial intelligence.
• Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, stated to CNBC that the challenge lies in making it easier to conduct business in India.

The WeLead Lounge and India Engagement Center are located on the Davos Promenade, showcasing India's female leadership, talent, growth story, digital infrastructure, and startup ecosystem to attendees of the World Economic Forum.

In the forum, Wipro, Infosys, Tata, and HCLTech are showcasing India's expertise in key technologies such as artificial intelligence.

India is showcasing its growing strength as a nation of innovation and a global business hub to some of the world's richest and most powerful people, following its surpassing of China as the world's largest population last year.

India's presence on the main promenade for tech companies is significant, and its relatively rapid growth makes it a clear opportunity for investors looking for bright spots as China's economy slows down, according to Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, who spoke to CNBC at Davos.

In 2022, China's GDP increased by 5.2%, up from 3% the previous year but down from 8.1% the year before that. Meanwhile, India experienced a 7.2% growth in the last fiscal year, which was lower than the 9% increase seen in the previous year.

India is increasingly positioning itself as a dominant force on the world stage in terms of technology and business, with states such as Maharashtra, Tamil Nadu, Telangana, and Karnataka showcasing their presence at Davos as tech hubs for manufacturing and AI.

According to Agrawal, who has been attending Davos for more than a decade and is the author of "India Connected," the separate state pavilions at the event convey a message that various regions in India are competing with one another to provide global companies with the best access.

India still faces plenty of challenges.

According to the World Bank, India typically experiences more people leaving the country than entering it. In 2021, net migration reached 300,000. Additionally, the rupee has significantly weakened against the dollar due to factors such as high U.S. interest rates and volatile oil prices.

The International Trade Administration highlights "price sensitivity" among consumers and businesses as a major risk when conducting business in India.

Agrawal stated that the challenge lies in making it easier to conduct business in India and whether domestic consumers will have enough spending power to justify continued global investment.

Seeking foreign investment

The amount of foreign direct investment in India has significantly increased from $36 billion in 2014 to $70.9 billion in 2023, according to data from Reserve Bank of India and S&P Global, as compiled by digital media publisher Visual Capitalist.

As part of India's production-linked incentive scheme, major manufacturers including Lenovo are pledging to produce their products domestically in the country.

One of the largest U.S. companies has shifted its manufacturing from China to India to avoid supply chain problems with the iPhone and other critical products.

Apple BKC, the first store in India, was opened by the iPhone maker last year, underscoring the significance of the market to its future.

Apple CEO Tim Cook stated on the company's recent earnings call in November that India had set a new revenue record for the company. He emphasized the market's potential and highlighted the company's focus on expanding its presence in the region. Despite having a low market share, Cook expressed optimism about the future of the Indian market and the company's ability to grow.

India is actively promoting investment from U.S. chipmakers through hosting major semiconductor industry events, such as SemiconIndia, where chip producers from the U.S. showcase their investments in the country and make new announcements.

In the AI chip market, which is chasing, announced plans to invest around $400 million in India over the next five years, including a new campus in Bangalore that will be the company’s largest design center. Additionally, announced plans to invest up to $825 million toward setting up a semiconductor assembly and testing facility in the state of Gujarat.

Jack Hidary, CEO of SandboxAQ, stated that India is experiencing an increasing adoption of technology as a result of inefficiencies in healthcare and other essential public services.

Hidary stated that AI presents a chance for India to distinguish itself among others.

According to Hidary, the transformation that has occurred is far beyond what mobile phones can achieve. After the U.S. and China began investing in mobile infrastructure two decades ago, almost everyone in those countries quickly obtained a smartphone and had access to the internet and apps.

"India has 600 million people without smartphones, but that's about to change," he stated.

Jio, the smartphone company owned by Indian billionaire Mukesh Ambani, will serve approximately 600 million people in India through a $12 device. Ambani, Asia's wealthiest individual, is also present in Davos for the World Economic Forum.

India is making a significant push at the event as its leaders recognize it as a moment of great transformation, according to Hidary.

Big year for India

India is set to hold general elections between April and May, with Modi seeking reelection.

In Modi's term, significant U.S. tech corporations, including Amazon, Google, and Facebook, have made substantial investments in India. Amazon invested $2 billion in the country in 2014 and another $3 billion in 2016. In 2018, Facebook acquired e-commerce company Flipkart for $16 billion.

In 2020, Reliance Industries' digital arm, Jio, received $5.7 billion in investment from Meta, and later Google added another $4.5 billion.

The U.S. has been leading efforts to isolate China globally, particularly in terms of technology access, as India's rise has caused China increasing difficulties on the world stage.

For months, Beijing has been unable to import advanced chips from U.S. companies such as Nvidia, Intel, and AMD.

According to Ian Bremmer, president and founder of Eurasia Group, India's chances of strengthening further are high due to its democratic nature.

According to Bremmer, India is a stable country with a popular leader. The upcoming election in India is expected to be uncontroversial, free, and fair. Additionally, India's growth rate is strong.

Bremmer compared India to the U.S., highlighting India's decentralized nature and the competition among states for investment. He suggested that the U.S. states might adopt a similar approach in the future.

It is possible that in five years, individual U.S. states, such as Texas and California, would make decisions regarding fossil fuels and sustainable energy at Davos.

— CNBC’s Arjun Kharpal contributed to this report

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