Emerging global trends on the demographics, digitalisation, decarbonisation, and deglobalisation fronts are favouring India, enabling the country to lead one-fifth of global growth in the current decade, a recent thematic report by Morgan Stanley stated.
‘The New India’ report by the analyst sees the country becoming the third-largest economy and stock market in the world before the end of the decade. An economic boom “fueled by offshoring, investment in manufacturing, the energy transition, and the country’s advanced digital infrastructure” will lead to this outcome, it said.
India cemented its place as “the office to the world” during the pandemic, the report said, showing the strength of its services sector. Government incentives and concomitant developments are now allowing the country to gain traction as the factory of the world as well, it said.
“Investment in services and manufacturing will come from foreign direct investment and a large increase in private domestic investment,” analysts at Morgan Stanley said.
The report cited IndiaStack to emphasise the transition towards a digital economy in India. “IndiaStack, which operates at population scale, is a transaction-led, low-cost, high-volume, small-ticket-size system with embedded lending. It will take India from a ‘prepaid’ economy to a ‘postpaid’ one.”
While the digital revolution has already transformed the way India handles documents, invests, and makes payments, it will now alter the way it “lends, spends, and insures,” the report said.
As the world undergoes an energy transition, India is seeing a simultaneous change in both its energy consumption and energy sources in a disruptive fashion, the report said. Since India’s energy needs are still growing, legacy capacity using fossil fuels will not be destroyed as it transitions to a higher share of renewables, it added.
