Why India?
India’s scale is extraordinary, there is no market over the next 20 years which offers more growth opportunities for business than India.
- By 2025, one-fifth of the world’s working age population will be Indian.
- By 2030 there will be over 850 million internet users in India.
- By 2035 India’s five largest cities will have economies of comparable size to middle income countries today.
A long view is important for any strategy. For India it is essential. India is a market which requires patience, perspective and preparation. Change in India is often invisible to the naked eye. That is one reason why perceptions of India in the Nordic business community are slow. Many are largely unaware of the significant positive changes taking place in India and shaped by a ‘once bitten twice shy’ perspective, ref Telenor.
India needs to be understood on its own terms. It will always march to its own tune. It is the only country with the scale to match China but it will not be the next China. Comparisons with China only get in the way of understanding the nature of the opportunities in the Indian market.
No Indian Government will be able to direct the economy in the way China does. Nor will it ever have the control over the allocation of resources which has been intrinsic to China’s economic success. China has a discipline to its economic planning which flows from its one party political system and the competence of its state institutions
Indias growth will be driven by consumption and services, not exports. It has demographics on its side, a long entrepreneurial tradition, an expanding consumer class, significant headroom for productivity improvements and the confidence that comes from a strong sense of its civilizational pedigree and destiny.
The drivers of Indian growth are deeply structural which suggests they are also sustainable. They include the urbanisation of the world’s largest rural population, the gradual movement of the informal economy, currently comprising 90 per cent of India’s workers, into the formal economy, a young demographic with a mean age of 27-28, considerable investment in infrastructure, and the beginnings of an ambitious program to upskill 400 million Indians.
Most of all India has scale. It will by 2035 overtake China as the world’s most populous country. This means a deep domestic market which will likely make India the world’s third largest economy by 2035 after China and the United States measured by market exchange rates. It is already the third largest economy measured by purchasing power parity.
Source: Peter N. Varghese – “An India economic strategy to 2035, navigating from potential to delivery”