India - Enroute to becoming the new Global Leader

Final Blog on India is forging its way towards becoming one of the potential superpowers of the world. Let’s see how.

·?????Manufacturing prowess:

Ola Electric CEO Bhavish Aggarwal announced in March 2021 that the company was building a 500 acre, fully automated factory in?Pochampalli, a town in the?Krishnagiri district?of Tamil Nadu, to manufacture electric two-wheelers.?The company claims it will be the largest two-wheeler factory in the world with an annual production capacity of 10 million units.?The factory named the Ola FutureFactory produced its first electric two-wheeler on 15 August 2021. The factory will produce two models - S1 and S1 Pro - and is scheduled to begin delivering vehicles to customers who placed pre-orders by October 2021.

As America and other western nations seek to counter a rising China?, no nation is more important than India, with its vast size, an abundance of highly skilled technical professionals, and strong political and cultural ties with the United States. But the parallels between America’s dependency on China for manufacturing and its dependency on India for IT services are striking. The same forces that increasingly divide the United States and China are now pushing the United States and India closer together. Since COVID-19, most of the discussion about India as a supplier has focused on whether U.S. companies can move some of their China-based manufacturing to India. To demonstrate that it wants to support global manufacturers, India emphasizes its direct financial support through its Production Linked Incentive (PLI) scheme (which provides cash incentives for volume manufacturing increases), competitive corporate tax rates, approvals of both joint ventures, and 100 percent-ownership structures, infrastructure improvements, low-cost labor, land-use reforms, access to the domestic India marketplace, the rule of law, the use of the English language, and free trade agreements with most major markets.

·?????Outsourcing. ITES

It is expected that the Indian IT services sector will stage a strong recovery this current fiscal, (2021-2022) with overall revenue growth of 10 to 11 percent. The improvement will ride on increasing outsourcing and accelerating digital transformation services driven by the pandemic, mainly in sectors such as banking, financial services and insurance (BFSI), healthcare, retail and manufacturing.

A few stats:

o??The IT outsourcing industry in India is expected to experience a 7.25% CAGR growth and reach INR 8,830 billion by 2025 from INR 5,649.47 billion in 2019.?

o??Over 40% of the Indian workforce is expected to enhance their skills and become better assets in the development process by 2022.?

o??India ranks first in the list of countries with the highest ISO-9000 certified software companies and even houses over 75% of the world’s CMM Level 5 certified companies.

o??India is second only to the US in the list of largest English-speaking countries, eliminating any communication barriers.?

o??By 2023, India is expected to overtake the United States in having the most software developers in the world.?

It’s not just the quality of IT services delivered or the cost, there are many reasons that make India the preferred outsourcing destination.? The major global companies that outsource their work to India are – Microsoft, Ford Motors, CISCO, Amazon, Google, IBM, American Express, Dell, HP, AT&T, and many more. That’s already a pretty exhaustive list!

·?????Trading harbors

The Indian port sector plays a vital role in sustaining growth in the country’s trade and commerce. It also has an important role in fulfilling India’s dream of achieving greater global engagement and integration with its trading partners.

According to the Ministry of Shipping, around 95% of India's trading by volume and 70% by value is done through maritime transport. India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry plays a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth-largest maritime country in the world with a coastline of about 7,517 km. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbor construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways, and inland ports.

The Road Ahead:

India needs to invest in developing a skilled talent pool from the base level i.e., creating futuristic curriculums that aid in employability and skillsets that facilitate innovations across colleges and universities. The government needs to take several more steps to boost the country’s export sector. Some measures it can take include tax-sops on specific exports, interest subvention schemes, and signing free trade deals. ?A huge area of focus is on productive and high-risk investments. This is the only way that India can grow into a superpower. The growing global partnerships with tech giants across the borders have put India on the global economic map. Especially since the CoVID situation, the geo-political scenario has transformed to present India with unprecedented opportunities. This is an opportune time to seize the prospects and channel our resources (human, tech, manufacturing, land, scientific think tanks of India) into creating a global leader that’s INDIA.

Conclusion:

India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

As rightly pointed out by N Chandrasekaran, Chairman, Tata Group - “We need to recognize the fact that tech, manufacturing, and energy are converging in the creation of a new platform and new ecosystems.” Also, the brilliant initiative by TCS, CEO – Rajesh Gopinathan to expand the revenue base from the existing customer base by branding TCS as a high-end business strategist alongside cutting-edge IT services provider is a constructive step towards putting India on a higher pedestal in the global market.