The Indian economy has remained resilient and is on track to grow by seven percent in the FY 2024 despite the ongoing global headwinds caused by external factors like post-pandemic spillovers, supply chain disruptions due to the ongoing Russia-Ukraine conflict, and potential recessionary pressures facing developed economies. This resilience can be attributed to large domestic markets, coupled with consistent efforts on the part of the government to strengthen the supply side through reforms like PLI schemes, national logistic reforms, fostering ease of doing business through digitization, etc. This article outlines measures aiding India’s business climate and highlights the main macroeconomic trends and prospects surrounding the Indian economy in 2024.
Indian economy at a glance
According to estimates from the International Monetary Fund (IMF), India’s economy surpassed that of the United Kingdom in terms of size in 2022 and rose to become the fifth largest in the world with a 7.2 percent growth forecast for FY 2023.Despite global headwinds, India is well positioned to register impressive growth, backed by robust demand from its large domestic markets. A recent World Bank report titled “Navigating the Storm” underlines that Indian economy has proved remarkably resilient to the ongoing impacts of the deteriorating external environment, growing faster than most major emerging market economies (EMEs).With the banking system in good health to support the nation’s economic recovery, it is anticipated that private sector investment will rise in the forthcoming year, making India the bright spot in the Asian business and investment landscape.
“We believe India is set to surpass Japan and Germany to become the world’s third-largest economy by 2027 and will have the third-largest stock market by the end of this decade,” says Ridham Desai
Factors Faciliating Ease Of Doing Business In India
At the heart of ease of doing business reforms in India has been an extensive focus on rationalization and digitalization of regulatory compliances, encompassing the entire business cycle from start to exit. Rationalisation of regulatory compliances received the topmost priority in India. In 2022, the government has worked to simplify, rationalize and digitize 33,000 compliances across federal ministries, departments and States.
Trade facilitation has also seen a flurry of reforms recently, where India’s global ranking jumped up from 146th position in 2018 to 68th position in 2020. Initiatives such as the shift towards paperless compliance system, greater clearances through Risk Management System, etc. have helped lower dwell-time and transaction costs for exporters and importers.
With a GDP growth rate of 7.8 percent in Q1 of FY23-24 ( the fastest growing nation in the G20), India is expected to surpass its US$ 5 trillion economy goal by 2026-27. The country stands at a pivotal juncture in its economic evolution, where a dynamic interplay of factors reshapes its economic landscape and demographic structure.
Several key factors mark India’s current economic scenario. With respect to GDP growth, projections from the Economic Survey 2022-23 indicate that India is expected to experience growth ranging from 6.0 percent to 6.8 percent in the fiscal year 2023-24, with a baseline GDP growth of 6.5 percent in real terms. However, inflation has been a persistent concern in India’s economy. Efforts to manage inflation have been evident in recent fiscal and monetary policies, including the central bank’s rise in key interest rates in 2022 to control inflation. India has also been actively implementing fiscal policies to address economic challenges.
Trends And Opportunities In India
India continues to be a beacon of economic growth in a world facing global uncertainty. With steady GDP growth and a trajectory to become one of the world’s largest economies, India is attracting the attention of investors and businesses worldwide. Here are some of the key trends shaping India’s economic landscape:
Digital Transformation
The buzz today is about crafting “intelligent companies”. These are not your usual workplaces; they are where AI, IoT, VR/AR, cloud computing, blockchain, and 5G blend to streamline mundane tasks. Moreover, these technologies are all interconnected, transforming how we work, make decisions, and automate tasks.
Today, it is about integrating these processes and technologies smartly into systems to boost productivity, streamline supply chains, ramp up sales, and offer top-notch customer service.
New Investment Opportunities
India is evidently becoming a hotspot for innovation and growth. Venture capital funding for Indian startups is soaring, helping them expand and explore new markets. Further, the Indian government is rolling out policies and programs like the Startup India Seed Fund Scheme to fuel this startup boom. Therefore, as we look towards 2024, it is clear that these trends are setting the stage for a thriving, robust economic future in India.
Big Data
Big data is revolutionizing how businesses operate. Among the more impactful business trends 2024, big data is set to be a game-changer in industries like healthcare, banking, and manufacturing, where it aids in tackling complex challenges. As data generation skyrockets, companies have embraced advanced storage, processing methods, and machine learning to make sense of this data deluge. Additionally, big data now drives decision-making and trend forecasting beyond marketing, offering a clear view of global happenings. Moreover, it is enhancing cybersecurity, with data security analysts using it for real-time threat detection and mitigation.
Block Chain
Blockchain technology is making waves in India and shaping up as one of the key business trends 2024. The technology is weaving its way into public administration, data management, asset registration, and benefit transfers. Furthermore, a strong ecosystem of developers and startups pushes the boundaries, enabling the technology’s adoption across various sectors. Furthermore, digital payments and public sector banks are exploring the potential of blockchain. And let’s not forget India Stack, a collection of digital public goods set to revolutionize service enablement for citizens.
E Commerce
In the fast-paced world of 2024, e-commerce is not just growing; it’s transforming. As a key player in the business trends 2024, e-commerce is leveraging advanced AI and machine learning to offer highly customized user experiences. Despite challenges like soaring inflation and intensifying global competition, e-commerce is innovating to stay ahead. Additionally, the rising global population and development across nations are boosting demand and opening new business opportunities to align with evolving trends. We’re seeing a move towards more personalized interactions, from tailored product suggestions to real-time customer service.
Quantum Technology
Quantum technology is making huge strides and becoming one of the prominent business trends 2024. Researchers and organizations have been exploring its potential across various sectors. Expect to see quantum computing revolutionize areas like battery design, supply chain optimization, drug discovery, material science, and industrial data analysis. Quantum technology is also crucial in reducing carbon emissions and tackling environmental challenges. Additionally, banks and financial institutions are set to benefit massively, using quantum computing to boost AI systems for fraud detection, high-frequency transactions, and risk management.
Conclusion:
The Indian economic landscape is characterized by dynamism, diversity, and immense potential. From digital transformation to infrastructure development, renewable energy to healthcare, and agriculture to manufacturing, India offers a plethora of opportunities for investors, entrepreneurs, and innovators. Navigating this landscape requires a nuanced understanding of emerging trends, regulatory frameworks, and market dynamics. As India continues on its trajectory of growth and development, seizing these opportunities can lead to mutually beneficial outcomes for all stakeholders involved.
