Unlocking India’s Potential: The Future of Energy and Economic Growth

Hello Readers,

If you’re in the energy sector and haven’t been living under a rock, you’ve likely heard about Chevron’s $1 billion investment in India through ENGINE. Following in the footsteps of Shell, ExxonMobil, and BP, Chevron is tapping into India’s emerging talent to drive growth and scale. This major move raises intriguing questions: Why India? And what does this mean for the country?

I dug into this and found two insightful articles that shed light on these questions. Let’s start with “Why India?”. Vijay Govindarajan and colleagues, in their article “Does Your Company Have an India Strategy?”, discuss why India is on everyone’s radar. They highlight impressive metrics such as annual growth rates and price-to-book ratios, showing that Indian branches of major international brands often outperform their parent companies.?

According to the World Economic Forum, the ongoing largest urban transformation of the 21st century is happening in India. The growth of the middle class, from 14% in 2005 to 31% in 2021, and the projected increase to 63% by 2047, underscores this shift. Rapid urbanisation, migration from rural to urban areas, and rising disposable incomes are driving this expansion.

A Brookings report projects that out of 1.06 billion people globally who entered the middle class from 2015 to 2022, roughly one-third were from India. India’s GDP growth rate of 6.9% from 2010 to 2019, the second fastest among major economies, reflects this trend. Forecasts suggest that by 2075, China, India, and the USA will be the world’s largest economies, in that order.

For multinationals, these findings signal the need to invest heavily in India, tailor products and services to the local market, and leverage the country’s digital transformation to drive innovation.?

From India’s perspective, this growth represents a transformative journey across various sectors. The Indian government has ambitious plans, including:

- Achieving 8% GDP growth annually, aiming for a $19 trillion GDP by 2047.

- Creating 90 million jobs by 2030 and 600 million by 2047.

- Investing around $600 billion annually in energy transition.

- Raising per capita income to over $12,000.

McKinsey & Company outlines several key trends shaping India’s future. Among them, energy transition stands out. India, currently the third-largest emitter globally, has four key opportunities for decarbonization:

- Green Hydrogen: With advancements in synthesis and decreasing production costs, green hydrogen could help reduce CO2 emissions by 900 megatons annually by 2050.

- Carbon Capture, Utilisation, and Storage (CCUS): Scaling CCUS technologies could capture 11.4 gigaton of CO2 from sectors like cement, oil and gas, and chemicals by 2070.

- Natural Climate Solutions (NCS): Initiatives like reforestation and urban tree planting could sequester 640 megatons of CO2 by 2050.

- Material Circularity: Increasing recycling and reducing waste could cut emissions by 50-95% in sectors like steel and plastic, potentially abating 34 megatons of CO2 by 2070.

Other areas discussed include economic inclusion, innovation, banking, IT, and healthcare.

Returning to Chevron’s investment, this move is just one of many we can expect. As India navigates its rapid growth and challenges, the competition for talent in the energy sector will intensify. Chevron, Shell, BP, and ExxonMobil will vie for limited resources, and outsourcing will become commonplace. Companies will need to find new ways to differentiate themselves to attract and retain talent and maintain a sustainable presence in India.

The future looks promising for the Indian workforce with boundless growth opportunities. As we pursue economic advancement, let’s also strive to ensure a safe and equitable environment for all, especially women. Growth is meaningful only when it includes freedom and safety for everyone.