India’s Growth Story: A New Era of Success and Hope
The author is a member of the Institute. He can be reached at vschaturvedi@gmail.com and eboard@icai.in.
1. Global Paradigm Shift: De-risking Supply Chains & Make in India
After the pandemic, we observed a completely different approach in which the world conducts business with China. There is an active global effort to find alternatives to the global industrial production supply chain which was disrupted due to the pandemic. In the times to come, localization and building a self-sustained economic model will be the preferred theme of business. We already see a shift towards this theme. Though this will take time, as the right ecosystem needs to be built before full efficiency in localization is achieved.
Simultaneously, the pandemic is leading to changes in the globalization strategy of all major economies that are realigning strategies to de-risk their manufacturing supply chains. In these times, India has emerged as a trusted partner for global manufacturing and has shown its technological and intellectual competence by emerging as the leading global producer of vaccinations.
Climate of Trust & Make in India
In the last 5 years, the Government has promoted Make in India across the world and has built a climate of trust and friendship with significant sections of world leaders both in politics and business.
Ease of Doing Business & Global Inflow
Due to continuous efforts of simplification of various laws and building infrastructure over the last 5 years, India has gained significant rank in the Ease of Doing Business Index. Over 1,000 international firms are in advanced discussions to consider production in India, creating substantial job opportunities and boosting GDP.
The Prime Minister’s Five Pillars for an Emerging Business & Inclusive Culture:
While FY’21 saw good recovery, FY’22 and FY’23 are expected to be even stronger. Even though the Omicron variant posed brief headwinds, rapid vaccination limited the fallout—about 85% of adults in India were vaccinated with at least 1 dose as of mid-December 2021.
2. World-Class Infrastructure Investments & Financing Architecture
India is emerging as a global leader in investing in world-class infrastructure projects, driven by concrete blueprints announced in Union Budget 2021. Current trends suggest an unprecedented boost in infrastructure spending that facilitates the infusion of overseas capital and expands credit availability.
National Infrastructure Pipeline (NIP 2019–2025)
Supports more than 9,000 projects with a total project cost surpassing USD 1,949 Billion.
A live database of infrastructure projects worth more than INR 100 Crores providing lucrative investment avenues across Energy, Transport, Water & Sanitation, Logistics, Communication, Social and Commercial Infrastructure.
Development Finance Institution (NaBFID Act, 2021)
The National Bank for Financing Infrastructure and Development Act, 2021 established a government-owned DFI for extending long-term, affordable debt financing.
Projected to achieve a lending capability of a minimum of INR 5 Trillion by 2024–25.
Strategic Financing, Asset Monetization & Sectoral Allocations:
- India Investment Grid (IIG): Gateway for investing in stressed assets, allowing the acquisition and turnaround of commercially viable stressed projects.
- National Investment and Infrastructure Fund (NIIF): Anchored in 2015 with an INR 40,000 Crore corpus, deploying funds across three distinct vehicles: Master Fund, Fund of Funds, and Strategic Opportunities Fund.
- Asset Monetization & InvITs: Highways, railways, power grids, and airports earmarked for monetization through Infrastructure Investment Trusts (InvITs) holding public assets for domestic and global institutional investors.
- Zero-Coupon Bonds: Issuance of tax-efficient zero-coupon bonds by Infrastructure Debt Funds under active consideration to crowd in retail and public capital.
- Port PPP Operations: Tenders worth more than INR 20 Billion earmarked for public-private partnerships in port operations and management.
- Power Sector Discom Revamping: Comprehensive outlay worth INR 3 Trillion planned over 5 years to revamp power distribution companies via smart-metering and modern distribution infrastructure.
- National Hydrogen Mission: Advanced stages of launch enabling power corporations to meet domestic green energy demand and export green hydrogen and green ammonia.
- Digital Project Tracking Dashboard: Leveraging India’s IT prowess to deploy real-time monitoring dashboards to track publicly monetized infrastructure assets.
3. Performance Linked Incentives (PLI): INR 1.97 Lakh Crore Outlay
The Government of India announced an aggregate outlay of INR 1.97 Lakh Crores for Production Linked Incentive (PLI) Schemes across 13 key sectors. The objective is to establish national manufacturing champions, generate massive employment for India’s youth, and build self-reliance under the ‘Atmanirbhar Bharat’ vision. The scheme creates a significant multiplier effect by driving private capex and boosting the global export competitiveness of Indian products.
4. Green Technology Revolution & Renewable Energy Shift
Clean Technology Fund & Solar Ambitions
India is pioneering a low-carbon growth trajectory to transform its fossil-dependent energy architecture. The majority of India’s USD 775 Million Clean Technology Fund (CTF) investment plan supports the deployment of over 3 GW of new installed solar power capacity and associated transmission corridors. CTF concessional financing directly mitigates upfront capital burdens for ultra-mega solar parks while de-risking investments in rooftop solar photovoltaic systems.
The Electric Vehicle (EV) Transition
Green technology is critical for building a sustainable economy and mitigating climate risks. Leading domestic industrial conglomerates have committed massive capital investments into renewable energy and clean mobility. The country is witnessing an unprecedented revolution in the electric vehicle (EV) segment, which presents monumental opportunities across manufacturing, battery storage, and charging infrastructure supported by strategic government subsidies and incentives.
5. Record Foreign Direct Investment (FDI) Inflows & Policy Liberalisation
With global manufacturers actively pursuing a “China Plus One” strategy to de-risk component sourcing, India stands out as a stable, predictable, and transparent investment hub. The Government has liberalized the FDI policy framework, permitting 100% FDI under the automatic route in most sectors.
Extended for another 5-year cycle (FY 2021–22 to 2025–26) with an allocated budget of INR 9.70 Billion to spearhead global investor facilitation.
6. Export Sector Revival & Bilateral Trade Engagements
India’s export sector has mounted a powerful rebound post-pandemic, extending strong double-digit growth driven by resurgent global demand, domestic manufacturing incentives, and newly signed trade agreements.
Milestone Targets
Merchandise exports on course to hit the historic USD 400 Billion target in FY’22, with momentum projected to carry outbound shipments to USD 475 Billion in 2022–23.
Exporters’ Liquidity & RoDTEP
Notified rates under RoDTEP (Remission of Duties and Taxes on Exported Products) and released INR 56,027 Crores in pending tax refunds to restore exporter liquidity.
New Foreign Trade Policy & FTA Negotiations
The Department of Commerce is finalizing a forward-looking Foreign Trade Policy (FTP) while aggressively negotiating comprehensive Free Trade Agreements (FTAs) with premier economic partners, including the United Arab Emirates (UAE), the United Kingdom (UK), and Australia. These pacts, combined with the structural impact of the PLI schemes, ensure India’s sustained emergence as a premier global manufacturing powerhouse.