🇮🇳 2023: A Deep Dive into India's Economic Outlook!
What Does 2023 Hold for Us? Is it truly India’s Decade? ReadOn.
Dear readers, we’re back! Hope you had a great start to the year. We sure did!
While our team mates Rajat and Pratibha are on a 15-day long train journey to learn deeper about India, we thought - why not start 2023 by taking a broader view on the Indian economy and making some predictions.
Come, let’s dive deeper.
🤔 First of all, is this truly India's decade?
It could be.
India is the world's fifth-largest economy.
By 2030 we're set to become the third-largest (says Morgan Stanley).
India is set to grow faster than the world:
India is young.
India’s median age is 28.4 years (v/s China and USA’s 38 years). Empowered with good education, right skills and income generating opportunities, our youth can take on the world.
Catch: This youth-dividend can only be encashed by creating income-generating opportunities for them.
🧐 Will India Focus on improving its Infrastructure and Manufacturing?
With 14 manufacturing related Product Linked Incentives (PLI), the manufacturing sector is expected to boom. This will (hopefully) help us reduce our Current Account deficit ($36.4B in Q2 FY23) by increasing exports and/or reducing imports.
Infrastructure looks like a big focus area for the government (last year, the Central Government had allocated INR 10L crores for infrastructure development).
With the National Logistics Policy also in place, supply chain improvements will lead to cost optimisations, and make our goods competitive in the global markets.
We are making ~ 30KMs of roadways, daily! The aim is to eventually reach 60KMs of construction per day.
While the government is trying its best to boost development via spending on infrastructure, the private sector is yet to go all guns blazing! Why?
Interest rates are on a rise (thanks, inflation), which makes it costlier for companies to borrow and makes certain long-term projects unviable.
If the inflation demon is allowed to reign free, we can say goodbye to all hopes of real growth!
💰 Will the Service Sector Bring in the Much Needed $$$?
While the world debates about remote work and flexible work, India has its own trend: work from India. Post-pandemic, 1,000+ companies have opened up Global In-house Captive centres (GICs) in India.
GICs are like BPOs (Business Process Outsourcing units) - the only difference is that they have only one client - their foreign parent who wants to leverage India’s English speaking, customer friendly and affordable talent-pool.
No wonder why India holds 45% of the world's GICs!
India has been the World’s IT service provider for long. If we play smart, we could also be the world’s:
Accountants and auditors (countries like Ireland are reducing fee for CAs in India and nudging them to complete their CPA online)
Doctors (Indian Doctors are anyway SUPER well respected abroad) - telemedicine
Yoga trainers
Many other services that can be delivered from a distance
👩🌾 Will Farmers’ Income Finally Double in 2023?
No one can say for sure. However, two factors are working in favour of Indian farmers:
Global acceptance
Innovation
Indian superfoods and herbs like turmeric and moringa are gaining popularity around the world. And Indian farmers are sitting on a gold mine.
Superfoods market is worth a whopping $166 billion!
Interestingly, the UN General Assembly has declared 2023 the “Year of Millets.”
Guess who's the biggest producer of millets in the world? India - proudly producing 41% of the world's millets. Millets are not only super healthy, but also climate-change resistant!
While global acceptance is rising, agri-related innovation is also picking up.
From Hydroponics farming to the usage of drones for spraying fertilisers and monitoring crops, entrepreneurs from Middle India are killing it!
To help farmers increase their crop yield, startups are using AI to understand which crop should be planted for a particular soil type, when they should be planted, how they should be maintained etc.
This agricultural innovation has been possible thanks to agritech startups being able to raise funds despite the (alleged) funding winter - $393M raised between Jan - Sep 2022 vs $235M between Jan - Sep 2021.
✍️ Summing it up…
With growing global acceptance and visibility towards India’s agriculture, a young population and government’s support to lay down the infrastructure for India’s growth and a growing service economy, 2023 seems to be a promising year.
And as usual, we will be there to handpick, deep dive and cover the most important stories for you in 2023.
As we say goodbye for today - we can’t help but think what 2023 will have in store for the World. And how India will be affected by it.
We will answer these questions (and more) in tomorrow's piece.
Stay tuned! Jai Hind.
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See you tomorrow :)
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Recommended Related Reads:
Why India Needs A National Logistics Policy
The Taiwan-China Conflict Explained
Can India Rule the $166 Bn Superfoods Market
Growing Crops Without Soil: The Answer to All Our Food Troubles?