Even while maintaining a stable yet moderate growth rate averaging around 6 per cent per annum, India is projected to become a $26 trillion economy by 2047–48, with per capita income exceeding $15,000 — nearly six times the current level — according to a report by Ernst & Young (EY).
The report said several key growth enablers uniquely position India to strengthen its standing in the global economy over the next decade and beyond. India is expected to overtake Germany and Japan to become the world’s third-largest economy after China and the United States by 2030.
India has already attained critical mass as the world’s fifth-largest economy, largely due to its economic liberalisation policies that made the economy more market-oriented, expanded the role of private capital, and enhanced global competitiveness. The report noted that India’s growth projections remain the highest among major global economies over the coming decades.
India’s services exports have grown by 14 per cent over the past two decades and stood at $254.5 billion in 2021–22. A substantial portion of these exports came from Information Technology (IT) services and Business Process Outsourcing (BPO), which together accounted for $157 billion during the same period.
This growth has been driven by both Indian-headquartered firms and global IT companies. In addition, multinational corporations are increasingly leveraging Indian talent through their capability centres in the country, which together employ more than five million people.
What initially began as a cost-arbitrage strategy has evolved into a major source of high-quality talent and cutting-edge innovation. India hosts around 1,500 Global Capability Centres (GCCs), representing about 45 per cent of global GCCs, reflecting the country’s scalable talent pool, access to skills in emerging technologies, and adherence to high-quality and efficient business processes.
These developments have collectively enabled India to emerge as the “office of the world” for global corporations seeking to adopt technology at scale.
The report said India is well positioned to build on this momentum by offering more skill-intensive and increasingly digitised services. Indian and global IT firms are expected to expand into higher-value areas such as consulting, experience design, full-stack digital engineering, Industry 4.0 product development, and advanced business process management.
Most IT services players are also expected to establish centres of excellence in India for cloud computing, analytics, artificial intelligence and other next-generation technologies. Significant progress is also being made in IP-based platform and product businesses, which are scalable, differentiated and sticky, creating a strong ecosystem for Indian hyperscalers to emerge over the next two decades.
Beyond IT, India also has a major opportunity in non-IT services as developed economies face shortages of skilled labour due to demographic shifts. Sectors such as education and healthcare are expected to benefit, with services increasingly delivered through digital channels.
India’s large telecom subscriber base of around 1.2 billion and 837 million internet users, combined with sustained government focus on building digital platforms, has laid the foundation for a strong digital economy. This has enabled the growth of a robust digital payments ecosystem and strengthened governance.
The report highlighted that consistent government backing over the past decade in building India’s Digital Public Infrastructure has yielded significant economic benefits, fostering innovation and entrepreneurship. Between 2014 and 2019, the digital economy grew at an annual rate of 15.6 per cent in absolute US dollar terms — 2.4 times faster than the overall Indian economy.
— IANS
