Have You Ever Been Thinking India Could Become A Superpower?

According to Goldman, India is on track to become the second-largest economy globally by 2075. And you won't believe what Martin Wolf from the Financial Times has to say - he thinks that India's purchasing power will outshine the United States' by a whopping 30% by 2050! Crazy, right? Well, after taking a deeper look, it seems more than realistic. In this article, we will delve into the factors that could propel India to 2nd place on the podium.  

China’s Tensions Will Benefit to India

The changing dynamics in the global economic landscape, notably the escalating tensions between China and Western economies, particularly the United States, have catalyzed a remarkable transformation in India. This transformation is manifesting in the form of new and exciting business prospects, with perhaps the most prominent being the burgeoning partnership between India and Apple for the manufacturing of iPhones. With an ambitious target of producing a staggering 20 million iPhones annually, this venture alone is poised to generate an impressive 50,000 job opportunities. 

Beyond the realm of consumer electronics, India's appeal extends to the field of military-grade technology, particularly in the context of space launches. In this arena, India enjoys a burgeoning reputation for reliability and trustworthiness, eclipsing China as a preferred host for such critical endeavors. This newfound faith in India's capabilities is underpinned by an already thriving ecosystem in place.

“Over the last 10 years, India's perception has gone from being a beggar country to an economic superpower.”

Vivek Wadhwa

Its Digital Infrastructure Keeps Improving

One of the most remarkable transformations has occurred within India's digital infrastructure. With a staggering 881.25 million internet subscribers, India boasts the second-largest internet-enabled population globally, trailing only behind China with its 1.05 billion users. Leveraging this widespread connectivity, India has pioneered a digital public infrastructure model that has garnered attention from other nations. This model integrates a population-scale unique identity system, a seamless digital payments interface, and an efficient data management system, enabling citizens to access critical documents online, including tax records and vaccination certificates. Collectively, these advancements have greatly enhanced the accessibility of public services and credit to a broader segment of the population.

A telling sign of this transformative shift is India's remarkable leadership in digital payments, surpassing China by a significant margin. It is worth noting that India's digital payment volumes exceed the combined digital payments made in the following four leading countries.

“...we believe there is tremendous potential… The underlying strengths of India remain. It is the largest producer of milk in the world; it is one of the top three producers of wheat in the world and has the largest growing middle class.”

Mr Michel Combes
Global CEO, Alcatel-Lucent

Harnessing India's Youthful Workforce: A Game Changer for Economic Growth

One aspect of the supply-side narrative presents a familiar scenario: By the year 2030, India is projected to have a working-age population of approximately 1.04 billion individuals, marking a historic low in its dependency ratio (number of dependents aged zero to 14 and over the age of 65, compared with the total population aged 15 to 64) at 31.2%. This demographic phenomenon is poised to play a significant role, as it will contribute to nearly a quarter of the world's expanding workforce. Moreover, this surge in the working-age population is anticipated to persist until the year 2055.

India’s diaspora also plays a crucial role in India’s growth. Indeed, many Indians move abroad for education. Who hasn’t heard of Sundar Pichai? After emigrating to the USA and earning an MBA from the Wharton School, he moved to McKinsey and then switched to Google in 2004, where he later became CEO in 2015 and the CEO of Alphabet, the parent company, in 2019.

In the financial world, 26 CEOs of S&P 500 companies are Indian-born, constituting over 5% of the Index and 13% of its total market capitalization. Interesting fact: India is the leading country of origin for immigrant founders of US unicorns. 

The Green Energy Transition is a Key Factor in India’s Development

India is also making significant strides towards a green transition. With a commitment to renewable energy and sustainability, the country is investing in clean technologies and initiatives. This not only helps address environmental concerns but also opens up new opportunities for economic growth. 

Good to know, the country is already ranked 4th worldwide in renewable energy installed capacity. But India doesn’t want to settle for “just” this. Its ambitions are clear as the government planned to install 500 gigawatts of renewable energy capacity, aiming to produce 5 million tons of green hydrogen yearly by 2030, reducing emissions by 45% along with a billion tons of CO2. On the workforce side, the World Economic Forum stated it will create 50 million new jobs and $15 trillion in economic opportunity by 2070.

By embracing renewable energy sources and implementing sustainable practices, India can position itself as a leader in the global green economy.

Key Points to Remember

• India's diaspora, including figures like Sundar Pichai, contributes significantly to India's growth.
• India is actively transitioning towards green energy, aiming to become a global leader in renewable energy and sustainability.
• India has made substantial improvements in its digital infrastructure, benefiting from a large internet-enabled population and innovative digital public infrastructure models.
• India's growing reputation in military-grade technology, especially in space launches, positions it as a preferred host for critical endeavors.
• India's demographic advantage, with a large working-age population, is expected to play a significant role in its economic growth and global workforce contribution.