India Aims to Become Third Largest Economy by 2030: PHDCCI President
Sanjeev Agrawal, group chairman, MMG group & president, PHD Chamber of Commerce & Industry (PHDCCI), plays a pivotal role in driving industrial growth and enhancing the business ecosystem in India. As president, PHDCCI, Agrawal focusses on supporting MSMEs, collaborating with stakeholders to shape policies that foster entrepreneurship, innovation and sustainability. An accomplished academic, he also actively engages in philanthropic initiatives in healthcare and education. Excerpts:
Which sectors are expected to be the primary drivers of growth in India’s journey?
India’s economy needs emphasis on multiple sectors, such as the automotive, FMCG, Fintech, IT and pharmaceutical industries. With the rise of electric and driverless vehicles anticipated, the automotive industry has drawn $35.6 billion in foreign direct investment (FDI) between April 2000 and December 2023. Digital connectivity and changing lifestyles assist the FMCG industry and, by 2028, the food processing market is expected to grow to $547.3 billion. By 2025, fintech, which includes payments, digital lending and more, is expected to reach $50 billion, with $1 trillion invested in insurance alone. With FDI of $97.3 billion, the IT sector, which focusses on AI and Big Data, is growing at a rapid pace. By 2030, the pharmaceutical sector is projected to generate $130 billion, with $22.3 billion in FDI.
How can the government address them so that the nation can move towards higher growth?
India’s economy is heading for significant growth. Fiscal management and inflation might be challenging. It is commendable that the government and the RBI are tackling inflation with pragmatic policy measures, since this is resulting in a softer inflation trajectory and inflation being within the 2–6 per cent RBI target range. It is inspiring to note that the fiscal deficit is estimated at 4.9 per cent of GDP for 2024-25, and the government aims to reduce it to 4.5 per cent of GDP, keeping on the path of fiscal consolidation.
What specific policy reforms are pivotal for achieving the high economic target?
To achieve its economic targets with inclusive growth, India needs crucial policy reforms. These include a National Employment Policy focussing on job creation through enhanced university-industry linkages and R&D across sectors like MSMEs, large companies, start-ups, NGOs and the government. Simultaneously, India must propel manufacturing growth to double digits, integrate more with global supply chains, and modernise infrastructure for Tier II and III cities, while upgrading rural areas into smart villages. Strengthening agriculture, addressing inflation, boosting digitalisation, promoting women empowerment, ensuring inclusive healthcare and advancing environmental protection are also vital policy measures towards sustainable and equitable development.
How might global economic trends and geopolitical shifts impact India’s ability to reach the high GDP growth target for 2024-25?
India has shown remarkable resilience in the face of dynamic geopolitical conditions and volatile global economic trends. India’s high growth trajectory is expected to persist in the near future despite geopolitical challenges, owing to strong policy initiatives, strong hand holding from the government and an inflation trajectory within the RBI target band.
It seems mobile manufacturing, among others, is diversifying businesses from other countries. What is your perspective on this?
The integration of India into global supply chains and its extensive connectivity with regions across the globe is reflected in the upward trajectory of our exports. Over the years, India’s exports have experienced remarkable growth, with the total exports (merchandise and services) increasing from $526 billion in 2019-20 (pre-Covid) to $778 billion in 2023-24 (post-Covid). We appreciate that India’s goods and services exports are expected to cross $800 billion during this fiscal, as also emphasised by Commerce & Industry Minister, Piyush Goyal. It is highly appreciable that, by the end of the April-June quarter (Q1) of 2024-25, electronics had surpassed diamonds & jewellery in India’s top 10 exports, driven mostly by a boom in Apple iPhone shipments. Only petroleum products and engineering items are ranked higher. During the same quarter, 2023-24, electronics ranked fourth.
What advantages does India have that help in attracting new big-ticket investments?
India’s economy has shown remarkable resilience and its GDP growth is expected to surpass 7 per cent in 2024-25. Various indicators, such as the PMI index, automobile sales and robust tax collections indicate sustained momentum. This can be attributed to the proactive reforms implemented by the government that have improved the ease of doing business, strengthened the capital markets and supported softening of inflation. We are all set to position ourselves as the second largest in the Asia-Pacific region and the third largest economy in the world by 2030 and ‘Viksit Bharat’ by 2047.