India is set to double its GDP by 2030, according to S&P Global Research. Pegging India’s GDP growth this financial year at 7.2 per cent, much higher than those predicted by the likes of World Bank and RBI, S&P says the country will have an average 6.7 per cent growth till 2030.
This will see India’s GDP rising from $3.4 trillion to $6.7 trillion.
S&P says much of this growth will be spurred by the immense opportunity to increase its share of global manufacturing exports under changing geopolitical and economic scenarios after Covid. The slowdown in China and a global reconfiguration in looking for a ‘China + 1’, the agency says, is a golden opportunity for the country to capitalise on.
“With China slowing, alternatives are emerging,” said a senior S&P analyst. While this will see opportunity veering to ASEAN nations, the significance is that “India which was never a player in this area is now emerging. India’s share is now increasing.”
The ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives of the government are seeking to raise manufacturing to 25 per cent of GDP by 2025. It is presently at 17.7 per cent.
While manufacturing is being given a push by the government through PLIs, other areas that would see rapid growth includes startup ecosystem, and energy sector among others. S&P says the share of venture capital flowing into Indian startups will also double by 2030, with verticals benefiting including electric mobility, space technology, artificial intelligence, drones, robotics and clean technology.
Amidst all the rose-tinged prophecies, S&P has also pointed out the dire need to upskill India’s labour force to match up to the changing needs of technological advances and global markets. For example, real manufacturing value added per employed person in India is just above $8,000, much lower than ASEAN countries like Malaysia and the Philippines. Malaysia’s comparative productivity is more than four times that of India, at above $34,000.
“India’s ability to become a major global manufacturing hub will be a paramount test for its economic future. Developing a strong logistics framework will be key in transforming India from a services-dominated economy to a manufacturing-dominant one,” said the S&P report which is aptly titled “Look Forward: India’s Moment”. The report adds that “Upskilling workers and increasing female participation in the workforce will be crucial for India to realise its demographic dividend.”