What will drive Indian growth over the next few years?
1. Demographics: Young country
Median age – 28.7 years
Population under 20 years – 38%
Most Indians will work for decades before retiring while millions new will soon join the workforce.
Bigger workforce = Higher GDP
2. Digitalisation: India stack – A set of open APIs around identity, payments, and data to bolster the economy.
Examples: Aadhaar, UPI, eKYC, Digilocker, ONDC, etc.
India stack = Economic efficiency + Empowered small businesses
3. Decarbonisation: The world is decarbonising to stop and reverse Global Warming.
Paris Accord – Signatories have pledged to decrease fossil fuel dependence.
GOI's (Government of India) Energy transition initiatives:
1. EV push – 30% cars, 80% buses by 2030
2. Renewable power – 500 GW by 2030
GOI investing billions in renewable energy will create jobs, make cities cleaner and liveable, and bolster the economy. It will reduce dependence on energy imports.
Lower oil import = Lower energy bill, trade deficit, & inflation = Stronger growth
4. Deglobalisation: China’s economic miracle was a consequence of globalisation. Deglobalisation will make India an economic superpower.
World outsourced manufacturing to China in the last 3 decades. But Covid exposed faults in the global supply chain. China and USA trade war is the final nail in the coffin.
The USA and its allies decouple China and move factories closer to home and other Asian countries.
Result: The rise of the Indian manufacturing sector.
Other tailwinds: Tougher immigration and insular governments mean an explosion in tech outsourcing to India – the office of the world.
India's advantage: World-class talent, Low wages
As technology becomes even more critical to the global economy, India's tech talent will be a game changer.
“The software will eat the world” Marc Anderssen
“Indians will write this code” Unknown :D
Verdict 2030: Long-term competitive advantage and the world’s third-largest economy
Stock Market Capitalisation: $10T
Exports: 4.5% of world exports
Credit / GDP = 100%
Share of renewable energy: 41%
Source: Morgan Stanley