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HON'BLE PRIME MINISTER SIR : Strategic Inputs to Make India the 3rd Largest Economy of the World (Part .1)


To                                                                                   Date: 19th Dec  2023

Shri. Narendra Modiji,

The Hon’ble Prime Minister of India.

 

Respected Hon’ble Prime Minister Sir,

Sub: Strategic Inputs to Make India 3rd Largest Economy of the World.

I hope this letter finds you in good health and high spirits.

Allow me, as a member of the Opposition Party to extend my support to your vision of elevating India to become the 3rd Largest Economy globally. I intend to provide comprehensive strategic inputs in FOUR PARTS, each of which shall be conveyed to you via multiple channels: email, hard copies, and a link shared through Twitter. The first part focuses on identifying industries where India possesses inherent strengths.

Before explain the PART -1 of my strategy, I deem it essential to consider two pivotal indicators of economic growth: Gross Domestic Product (GDP) and GDP Per Capita. As of 2023, the largest economies worldwide include the United States of America, China, Japan, Germany, and India, ranked based on their respective GDP figures.

 


Analyzing Table above, it becomes evident that India must surpass Japan, leading by USD $501 billion, and Germany, with a USD $700 billion advantage, to ascend to the position of the world's 3rd Largest Economy in terms of GDP. However, a disheartening aspect emerges when considering India's GDP Per Capita, significantly lower than that of the top 9 economies globally. This metric, calculated by dividing a nation's GDP by its population, is pivotal in indicating average incomes and is intrinsically linked to poverty reduction.

Upon scrutinizing the foundational strengths of the top 4 global economies, it's discernible that these economic powerhouses share several common attributes:

1) Vibrant Manufacturing Sectors

2) Robust Services Sector

3) Strong Exports

4) Advanced Technology

5) Substantial Consumer Markets

6) A Culture of Innovation

7) Comprehensive Infrastructure

8) A Skilled Workforce

In addition to these shared attributes, these leading economies benefit from conducive business environments, entrepreneurial encouragement, facilitation of Foreign Direct Investments (FDI) and Foreign Institutional Investments (FII), emphasis on research and development, a strong work ethic, and unwavering governmental support.

Considering India's inherent strengths, we must refocus our efforts on industries embedded in the Indian ethos. India boasts a populace known for its diligence and intellectual acumen, contributing significantly to economies like the USA, UK, and Germany. While acknowledging our existing prowess in industries such as BFSI, Software, Pharma, and Automobile, it's crucial to highlight six industries where India uniquely holds the potential to excel.

1) Education: The global market intelligence firm ‘HolonIQ’ forecasts international student spending (i.e Tution, Accommodation, Food, Retail, Insurance, Technology, Transport) to reach USD $433 billion by 2030. USA earns approximately USD $40.5 bn and UK £41.9 bn over the entire period of studies of International students. 

Institutions like IITs, IIMs, BITs, AIMS, and TISS produce highly regarded professionals in research, technology, and management. There exists an opportunity for India to market its esteemed educational institutions globally and establish campuses abroad, bolstering the reputation of Indian education as unparalleled in rigor and capability.

2) Science and Technology: 

2.1) Semiconductor production: Is crucial in various tech-driven sectors, presents a substantial market projected to grow to USD $1,380.79 billion by 2029 as per ‘Fortune Business Insights’. Indians have  innate capabilities to lead top technology corporations of the world as CEOs like - Microsoft, Google, IBM, Adobe, Honeywell, Oracle, Nokia, Twitter , just to cite few. 

India holds the potential for semiconductor manufacturing, considering its existing ecosystem and the presence of Indian Software tech giants like TCS, Infosys, Wipro and existing Hardware manufacturers like Compuage Infocom, HCL Infosystems, D-Link , Cerebra Integrated Technologies, Intex Technologies, Vintron Informatics, iBall India, Iris Computers.

These companies  can be enabled to produce semiconductors by  forming JVs with the leading Semiconductor manufacturers of the world to begin. Collaborative ventures between software giants and hardware manufacturers can enable India to establish semiconductor production, curbing brain-drain and fostering tech innovation.

2.2) Smart Phones:  As per ‘Skyquest Global’ smartphones market size is estimated to grow from USD $ 607.8 bn in 2022 to USD $978.2 bn by 2030 growing at CAGR of 6.8%  in the forecast period (2023-2030). 

Though India has companies like Micromax, Lava, Karbonn, Intex, Xolo, LYF, Spice, Celkon operating in this space, but none of them  are anywhere close to giants like Apple, Samsung,  Xiaomi, OnePlus, Realme, Vivo. It is surprising why India is not able to develop a giant in the space of Smartphones, Software producers or Semiconductors despite producing  finest Tech brains of the world year- on- year. I see one of the major reason  as lacuna in the field of R&D, innovations and funding. This hold true not only for Technology companies but also, Pharma and Defence. 

3) Healthcare: With a global healthcare market projected to grow to USD $277.21 billion by 2027, India, with its expertise in technology and medical sciences, is positioned to establish world-class medical facilities, invest in R&D, and become a major player in pharmaceuticals, medical equipment production and set-up hospitals, thus, becoming the health care hub offering  world class facilities to treat international patients at an affordable cost.

4) Tourism: India's diverse natural beauty, historical richness, and cultural heritage present an opportunity in the global tourism market, valued at USD $10.5 trillion in 2022. With proper infrastructure and preservation of monuments and natural sites, India can harness this sector to generate substantial revenue, much like Europe or countries like Thailand and Singapore.

5) Agriculture: Despite being an agrarian economy, India faces challenges such as dependency on monsoons, small field sizes, lack of modern agricultural knowledge, and a declining interest in farming among the youth. However, with initiatives like linking rivers, modernizing farming practices, and encouraging agricultural education, India can lead the growing global agriculture market, projected to reach USD $19,007.8 billion by 2027 as per ‘The Business Research Company’.

6) Luxury Brands: While India lacks global brands in luxury segments like fashion, automobiles, and high-end consumer goods, nurturing quality and innovation can propel existing Indian companies like Tata Motors, Titan, AND, Lakme and others to compete on the global stage.

Sir, a nation is considered developed also on the basis number of its companies making way in the list  of Fortune 500 or Forbes 2000. While  China has 124 companies in Fortune 500 list ; India has only 8. For India to become a global brand and a dominant exporter of good and services  - we need to build quality around every product and services we offer like Japan, Germany, Switzerland, and package and market them like USA, Italy and France. 

To summarize, if India secures just a 10% share of the industries mentioned above (excluding luxury brands), it could atleast generate an additional revenue of USD $230 billion by 2030. However, to achieve this, meticulous planning and execution of industry-wide strategies are imperative, necessitating urgent action to elevate India as the 3rd largest economy globally.

With these thoughts, I would windup First Part of my Strategic inputs.

Thanking You 

Yours Sincerely ,

Thakur Ajit Singh

Chairman – Investor & Consumer Protection Cell, Mumbai Congress


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