India At 2030 — How Tech Entrepreneurship Will Create a $10 Trillion Economy

India at 2030 — TV Mohandas Pai presenting at The Hive Think Tank, Palo Alto

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India is a $2.25 trillion economy today — the 7th largest in nominal terms globally. Its GDP has grown at 8.4% CAGR from 1991 to 2016 over a period of 25 years. By 2030, India’s GDP is expected to be $10 trillion and growing between 8%-10% a year. Its GDP in PPP terms is $8.7 trillion — the 3rd largest in the world.

Internal consumption and investments will drive India’s growth over the next decade. With a population of 1.27 billion, and a per capita income of $1,600 in nominal terms, the consumption story has a long way to go. Today, India’s consumption is 70% of GDP, with investment making up 30% and funded by a savings rate of 28% of GDP. India’s dependence on overseas capital is comparatively modest — only 1%-2% of GDP. Although it has a large trade deficit because of oil imports, high service exports in the form of software and remittances balance this trade deficit.

Over the next 15 years, India’s growth will also be fueled by its startups. Today, there are over 20,000 startups in India that have created a value of $80 billion and employ 325,000 people. Over the next ten years, by 2025, there will be 100,000 startups in the country that would have created over $500 billion of value and employ 3.2 million people.

India currently tolerates poor productivity of labor, inadequate automation, high supply chain costs, and a significant portion of the population not being connected to markets. The mobile revolution in India, with affordable data charges, will connect 1 billion Indians to the Internet by 2020; up from 730 million today. Startups are playing a distinct role in improving supply chain efficiencies to reduce costs and time to market, increasing consumption by lowering costs and connecting customers to markets, and driving volumes up. They are increasing labor productivity in manufacturing, financial services, health and education services, and several other areas of the economy. They are enhancing sustainability by reducing energy consumption. Finally, these startups are creating one single virtual national market for the first time in India’s history.

This talk is about India’s growth over the next 15 years and the prominent role that entrepreneurs and startups will play in its rapid evolution.

This talk was delivered at The Hive Think Tank in Palo Alto, California on Nov 22, 2016.