During the India Ideas Challenge summit hosted by the US-India Business Council, the Indian Prime Minister addressed the country’s position as a safe and reliable trading partner post-COVID-19. With all eyes on India’s ability to rise to the challenge, the PM highlighted India as a land of openness and emerging opportunities. We present some of the key sectors highlighted in the PM’s speech that we expect to ride this wave of growing optimism in India’s growth story.
Large population providing huge scope for IT penetration
India has been one of the top contributors to the global IT sector with nearly 500 million users actively using the internet, as per the Internet and Mobile Association of India’s (IAMAI) Digital in India report. Fintech and e-commerce are likely to gain more prominence as India transitions towards a cashless economy and more Indians enter the workforce.
An abundance of opportunities in agriculture
The pandemic has once again highlighted the importance of the agrarian economy. Increasing investments in infrastructure facilities and promoting food security will position the country as a preferred investment destination for the food processing sector, which is expected to be worth half a trillion dollars by 2025, according to Invest India.
Will healthcare of the 2020s be the IT sector of the 2000s for India?
The pandemic could be the critical breakpoint that was needed for India to revamp its healthcare delivery system. Going forward, increasing the investment in equipment & medical facilities in public hospitals and further impetus on domestic manufacturing could be the key growth drivers.
Clean energy new India
Recent investments in solar and wind projects are steps in the right direction towards India’s adoption of clean energy sources. With an ambitious target of achieving 450 GW of renewable energy by 2030, expect this sector to see a rapid scaling up of capacities.
One giant leap for Indian aviation
Passenger traffic is expected to nearly double in 10 years, according to Frost & Sullivan’s analysis. India remains well-positioned to become a critical part of the aircraft manufacturing supply chain, provided it takes appropriate measures to ‘Make in India’ attractive. Recent decisions to favour the setting up of aircraft Maintenance, Repair and Overhaul (MRO) facilities are a step in the right direction.
Strong defence and space capabilities
The government’s recent decision to increase the FDI limit in defence from 49% to 74% is a shot in the arm for India’s defence sector. The focus on local investment in defence production and restriction of imports will go a long way in India’s path to self-reliance in defence.
The big infra push
National Infrastructure Pipeline, launched recently, aims to enhance India’s infrastructure and help the country become a $5 trillion economy by 2025. The government has planned to increase the share of rail freight to 50% in 2030 with the introduction of dedicated rail freight corridors and multi-modal transport network.
Digital technology to drive financial inclusion
The government’s push towards financial inclusion and emphasis on digitisation would immensely benefit the rural population. There is a huge opportunity for lenders to monitor the repayments and provide customer-specific offerings in digital-enabled microfinance products.
COVID-19 has reshaped the global order and has placed India as one of the top alternatives to China-based global supply chains. Stability in decision making and adopting flexible policy positions that support business activity remains key in converting these growth opportunities.