Dynamic economic landscape in India is swiftly evolving with remarkable growth in multiple sectors.
IMF’s World Economic Outlook data revealed India's biggest leap, from 11th to the 5th position with over 90% growth in last decade. According to IMF’s data, India’s nominal GDP grew from $1,857 billion in 2013 (FY14) to $3,572 billion in 2023 (FY24). After such an acceleration, how India's economic future looks for upcoming decades? Let's understand.
India’s progress as a nation in last decade is attributed to a global dependency on cheaper production rate of goods and services from other developed countries across the world.
“Growth in India is projected to remain strong at 6.8 per cent in 2024 and 6.5 per cent in 2025, with the robustness reflecting continuing strength in domestic demand and a rising working-age population,” according to the World Economic Outlook released by the IMF.
According to the Asian Development Bank (ADB): “The Indian economy is expected to grow by approximately 8% in the next 5-6 years, endorsed by increasing public investment in infrastructure and a pickup in private sector investment.” As a result, India will be able to create at least 90 million jobs by 2030.
According to PHD Chamber of Commerce and Industry (PHDCCI) report submitted for Viksit Bharat @2047, the share of agriculture in the total GDP is predicted to come down to 12% in FY47, while the share of industry is expected to increase to 34%. With rising population and global demand, the overall share of the manufacturing sector is anticipated to increase from 16-25 % between FY23 and FY47. The contribution from services sector expected to remain the same.
Despite agriculture-dependent economy, India's other sectors are briskly Transforming. The opportunities in pharmaceutical, IT, and FMCG sectors are creating scope for innovative tech and non-tech startups. In last couple of years, startup environment in India has gone through a phenomenal transformation, securing third place among largest startup hub globally. Indian startups raised approximately $7 Bn in 2023. In the first quarter of 2024, 52 funds totalling around $4 Bn were accumulated by Indian startups. Tech startups is projected to grow from 68 thousand to 1.8 lakh in between 2023 to 2030.
Since launch of ‘Digital India’ initiative, strategic planning has helped remarkable growth in past decade. Former Union minister Rajeev Chandrasekhar predicted that the digital economy will contribute at least 20% of India's GDP by 2026.
With the advancement in Artificial Intelligence (AI), Data Science, and growing educated workforce, the Information Technology (IT) industry has flourished over last couple of decades in India. With the support by Indian government like ‘Make in India’ campaign, infrastructure sector is set to reach new heights in this decade.
Another promising sector, space tech industry is set to touch worth $13 billion by 2025, as per recent reports.
2024 is a remarkable year for Indian economy as it held the largest democratic elections globally with participation from 642 million people. The government has already set a goal of achieving the status of “developed country by 2047.”
By 2025, at least one-fifth of the global working age population will be Indian. By 2030, the internet users in India will reach 850 millions. By the next decade, combined economy of India's five largest cities will be comparable to middle income nations today.
It is also predicted that Indian economy will touch $19 trillion by 2047, creating 600 million job opportunities.
According to Pierre-Olivier Gourinchas, chief economist of the IMF: “Indeed, India is one of the strong performers. We had a fairly sharp revision in the Fiscal Year 2023 to 2024, the one that is ending, and that has just ended. Then we have 0.3 percentage point upgrade for Fiscal Year 2024 to 2025. So India is doing quite well.”
Thus, both Indian and foreign investors are highly motivated to invest in growing sectors in India.
With positive signs of the rural economy recovering, robust growth in manufacturing, along with stronger exports in services, the underlying potential will surely help India outpacing the growth in the rest of the world. This will be further enhanced by technological advancements, structural shifts, and supportive government policies.
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