While India may have seen an economic upheaval, it continues to stay a strong growth lever for the global economy, especially since it is one of the world's largest pools for talent and consumer base.
Global economy: A reality check
The World Bank has projected the global economy to grow 2.8 percent by 2021. Importantly, the World Bank is hopeful of a modest recovery in emerging markets and developing economies (EMDEs) like India, based on continued benign global financing conditions. EMDE growth is projected to pick up from a four-year low of four percent in 2019 to 4.6 percent in 2020-21.
Activity in the East Asia and Pacific and South Asia regions remains buoyant, while growth in other EMDE (Emerging Markets and Developing Economies) regions is expected to recover in 2020-21—good news amidst the challenges of an economic slowdown. It also indicates that bilateral and multilateral trade agreements will be critical for economic recovery.
For the US, restoring all bilateral ties with India would be an extension of the Quadrilateral (Quad) framework involving the US, Japan, Australia and India, a formidable force in this multi-polar world. For India, it is the most obvious route to fortify its digital dreams and power its run to become a $5 trillion economy over the next few years. Further, a stable geo-political environment, post presidential elections in the US and post Brexit, will support in boosting the positive sentiments and global economic growth.
The potential of India
An economically robust India has the potential to add tremendous value to the global economy. With its 1.3 billion consumers, a successful and thriving democracy, and over 400 million millennials, it can be a launching pad for the continent of Asia.
With more than half a billion internet subscribers and a 5G and 6G rollout just a few months away, India is one of the largest and fastest-growing markets for digital consumers, but adoption is uneven among businesses. As digital capabilities improve and connectivity becomes omnipresent, technology is poised to quickly and radically transform nearly every sector of India’s economy. That is likely to both create significant economic value and change the nature of work for tens of millions of Indians.
There is a massive ‘digital’ business opportunity in India, for not only the US, Europe and the rest of the world. India offers brilliant IT specialists, low-cost human resource and highly qualified technology experts.
According to a published media report, by 2020, millennials are going to make up 50 per cent of the total workforce in India and by 2025, a whopping 75 per cent. That means millennials will have the money and the purchasing power. They will also provide vast amounts of data and an opportunity for businesses to use artificial intelligence to improve global efficiency and create new opportunities.
With an eye on innovation, India is the third largest startup ecosystem in the world, having added more than 1,300 tech startups in 2019 (Source: NASSCOM). Interestingly, India now hosts 24 unicorns, the third-highest number of unicorns in a single country in the world. This clearly outlines the next phase of growth for India, with different sectors embracing digital technologies to make their operations smart.
Be it agriculture, healthcare, governance, logistics or the IT sector, new technologies are enabling numerous growth opportunities for large enterprises and start-ups in developing new products and service-lines. This will improve efficiency, productivity, and competence levels, thereby giving thrust to the economic growth of the country while bringing about social equality. India, because of its cultural, geographical, regional, geographical diversity, can be an innovation hub for stakeholders across the world to come together to build a cohesive and sustainable world.
Digital trade opportunity in India
Thanks to a burgeoning population and booming internet and mobile economy, the economic value of digital trade in India, including exports, has the potential of growing 14 times to $512 billion from $35 billion by 2030 (Source: report by All India Management Association (AIMA) and Hinrich Foundation). There is therefore an opportunity for India to play a leading role, in pushing for facilitative digital trade rules in its various bilateral and multilateral trade negotiations. India’s digital trade is set for rapid growth, provided India can create an enabling policy environment.
Placing the right bets
India’s role in shaping the global economy cannot be ignored. If India grows, consumption grows and provides a business opportunity for the US, Europe and the rest of the world. If India upskills, reskills and invests in the right areas, then it will benefit the global client and services industry. The country has thus rightfully introduced the necessary structural reforms, and is promoting an entrepreneurial ecosystem through initiatives like Skill India and Startup India. These initiatives will help India chart out a new growth trajectory while significantly impacting the global economic outcomes.
The author is MD and CEO of Tech Mahindra.
The thoughts and opinions shared here are of the author.
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