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India Today
5 days ago
- Business
- India Today
The great growth sprint: How India must reinvent to become world's second-largest economy
At the turn of the 20th century, the United States sprinted ahead of the United Kingdom to become the world's largest economy—a position it still holds. A hundred years later, China stunned the world by pulling hundreds of millions out of poverty and displacing Japan to claim the No. 2 India stands at a similar inflection point. The country has already surged past Japan to become the world's third-largest economy (behind China and US) in purchasing power parity (PPP) terms. Recent International Monetary Fund (IMF) data shows that in all probability, India will cross $4.19 trillion in nominal Gross Domestic Product (GDP) in the later half of the current fiscal, overtaking Japan in absolute dollar terms. If these trends continue, it will likely surpass Germany in another 18 months. But that's where the easy gains end—and the real race close the yawning gap with China, whose nominal GDP exceeds $17 trillion, and eventually catch up with the US, now at over $27 trillion, India will have to do what no democracy has ever done: grow at a nominal rate of 8-9 per cent every year for the next 25 years, while remaining socially cohesive, environmentally sustainable and politically stable. That will require more than reforms. It demands reinvention—of India's economic model, its state capacity, global ambition and social now, India is warming up well. It remains the world's fastest-growing large economy, averaging over 7 per cent real GDP growth in recent years, with a stable macroeconomic framework. Its expanding middle class is powering consumption, its start-ups are reshaping services, and digital governance is being hailed globally. But the leap from $4 trillion to $10 trillion and beyond will not be a linear stretch of what India is already doing. It will need bold shifts in structure, strategy and The rise of China created space for a global factory. India must now write a different story—not a replica but a reinvention. And the first pillar of that reinvention lies in India's ability to tap into a moment of global flux. Rising wages in China, intensifying geopolitical tensions and the West's 'China + 1' strategy have created a unique but limited opening. Multinational corporations are looking to diversify their supply chains, and India is clearly in the mix. But being in the mix is not enough. India cannot settle for being the back-up option; it must lead with a new narrative—'India Plus Many'.This strategy calls for India to not just be a cost-effective manufacturing base but to become the anchor of a broader economic ecosystem—one that connects value chains through Africa, Southeast Asia, West Asia and Eastern Europe. With strategic initiatives like the India-Middle East-Europe Economic Corridor and the India-UAE trade pact, India is beginning to lay the infrastructure for this vision. But execution will be key. Logistics, customs, compliance norms, power reliability and judicial speed must match the home, the reinvention must begin with a sector that remains the biggest paradox in India's economy—agriculture. Employing over 43 per cent of the population but contributing just 16 per cent to the GDP, Indian agriculture has been growing at a modest 3-4 per cent annually. If India is to unlock rural purchasing power, reduce disguised unemployment and rebalance its lopsided development, agriculture must transform—from subsistence to surplus, from grain-centricity to high-value crops, and from fragmented holdings to digital means investing heavily in irrigation, soil health, market linkages, food processing, agri-logistics and climate-resilient practices. India must build farmer-producer organisations at scale, digitise land records, and integrate smallholders into the formal economy. Schemes like eNAM and PM-Kisan are a start, but much more is needed to drive a rural FY25, India's real GDP was around at Rs 185 lakh crore, while nominal GDP stands at Rs 324 lakh crore. The difference reflects inflation's impact—nominal GDP accounts for current prices, whereas real GDP adjusts for inflation to reflect actual economic growth. With real GDP projected to grow at 6.4 per cent and nominal GDP at 9.7 per cent, the gap underscores the role of price level changes in economic measurement, offering a clearer distinction between value-driven growth and price-driven also indicates that a significant portion of this increase is due to rising prices rather than increased productivity or output. If inflation remains unchecked, it can erode purchasing power, raise interest rates and complicate fiscal planning. This inflation-growth gap also poses a dilemma for sustain long-term economic momentum and achieve India's aspiration of becoming the world's second-largest economy, the focus must shift to productivity-enhancing reforms, efficient public spending, and improving supply-side bottlenecks. Otherwise, high nominal growth without real depth could mask structural weaknesses and lead to overheating or urgency is underlined by a stark statistic: the differential between urban and rural GDP per capita is now 1:12.5. This growing gap, despite unprecedented rural spending by the present government, reflects the limits of redistribution without transformation. Direct transfers help cushion poverty, but only structural productivity gains can ensure enduring prosperity. Rural India must become a production powerhouse—not just a consumption this context, the rise of a new tier of digital-native, regional entrepreneurs from non-metro India is promising. If supported by infrastructure, credit and skilling, they can be catalysts for inclusive growth. The JAM trinity (Jan Dhan-Aadhaar-Mobile), ONDC (Open Network for Digital Commerce), and Account Aggregator frameworks offer the scaffolding. What's needed now is acceleration and integration—turning scattered pilots into a national while agriculture and rural transformation are foundational, India's economic leap will ultimately be powered by urban manufacturing, services exports, infrastructure, energy security, and innovation. The target must be to double manufacturing's share of GDP from the current ~14 per cent to at least 25 per cent. This requires sustained policy consistency, capital inflows, and deep skilling—especially in clean tech, semiconductors, defence manufacturing and Production Linked Incentive (PLI) schemes are a step in the right direction, but India must move beyond assembly to high-value innovation. Export competitiveness cannot rely solely on subsidies; it needs a full-stack approach: easier land access, judicial clarity, world-class logistics, and sectoral R&D. By 2035, India must aspire to be a $2 trillion export economy—not just in goods, but in services, education, health tech and is another hinge point. No large economy can grow without energy security. India's green transition—solar, wind, green hydrogen, EVs—must be matched by robust grid infrastructure and domestic critical mineral value chains. If the country succeeds, it could turn its climate challenge into a competitive of this will require a dramatically stronger human capital base. India must increase education spending to at least 6 per cent of GDP and shift focus from input metrics to outcomes—especially in government schools. Vocational training needs to become aspirational, digitally enabled, and demand-aligned. Tier 2 and 3 cities must become new hubs of bilingual, digital-savvy, skilled deepening is equally vital. With private credit penetration still under 60 per cent of GDP and corporate bond markets underdeveloped, India must turbocharge its financial system—by empowering NBFCs (non-banking financial companies), expanding retail participation and enabling large-scale pension and insurance penetration. Mumbai must aim to become a true global financial the apex of this entire architecture must be a competent, reform-oriented state. India will need to build institutional capacity at scale: faster courts, smarter regulators, empowered municipal governments, and data-driven public service delivery. Reforms must move beyond laws to implementation. The Centre and states must align on investment priorities, tax rationalisation and job creation. Cooperative federalism cannot just be a slogan; it has to be the engine of parallel, India must wield its geopolitical heft to build economic muscle. It must secure fair trade deals with the EU, US, Australia and East Asian blocs. It must expand its presence in Africa, West Asia, and ASEAN. Institutions like IPEF, BIMSTEC, BRICS, the Quad, and the SCO must become levers of geoeconomic influence, not mere talk shops. India's scale—1.4 billion people, rising incomes, digital governance—gives it leverage, but only if used the road ahead is strewn with pitfalls. The risks are real and complex. Geopolitical flashpoints with China or Pakistan could disrupt capital flows. New Delhi's acceptance of Islambad's request for ceasefire after Operation Sindoor was also deep from this philosophy that India wants to focus on building the economic might along with keeping a notorious Pakistan in shocks could derail consumption. The middle-income trap looms large; India must find a pathway to productivity-led, inclusive growth at around $10,000 per capita. Western protectionism in digital services or data localisation could limit India's export potential. And fragmented federal politics could slow down reform the biggest risk is complacency—the illusion that demographic advantage and incremental growth will somehow carry India forward. The truth is, India's demographic dividend is time-bound. By 2040, the country will begin to age. The next 15 years are not just an opportunity; they are a rise will not look like America's consumer capitalism. It won't mirror China's state-led authoritarianism. It must chart its own path—grounded in self-reliance, competitive markets, empowered citizens, and an inclusive Swadeshi globalism. This means investing in resilience, not just growth; in equity, not just efficiency; and in innovation, not May 27, on his visit to Gujarat, Prime Minister Narendra Modi issued a compelling call for 'Swadeshi'—urging citizens to boycott foreign goods and embrace locally made products. He emphasised that building a developed India by 2047 requires collective effort, stating, 'If we have to make this resolve... we will not use any foreign goods.'This appeal aligns with his government's 'Atmanirbhar Bharat' initiative, aiming to reduce dependency on imports and bolster domestic industries. The prime minister's message resonated with attendees, many of whom pledged to promote 'Made in India' products within their is pointing towards same trajectory. This is not a sprint. It is an epic marathon, made harder by global volatility and domestic complexity. But if India gets it right, it could become the world's second-largest economy by mid-century—and, more importantly, a model for democratic development in the 21st century. The baton is now with the policymakers, entrepreneurs, farmers, teachers, engineers and workers. The next chapter of the world economy may well be written in to India Today MagazineMust Watch
India Gazette
25-05-2025
- Politics
- India Gazette
All-party delegation led by Shiv Sena MP Shrikant Shinde pays tribute to Mahatma Gandhi in Congo
Kinshasa [Congo], May 25 (ANI): All-party parliamentary delegation led by Shiv Sena MP Shrikant Shinde paid floral tribute to Mahatma Gandhi's statue as it arrived at the Embassy of India in Congo on Sunday. The delegation led by Shinde arrived in Congo on Saturday. The delegation, led by Shinde, includes Bharatiya Janata Party (BJP) MP Bansuri Swaraj, Indian Union Muslim League (IUML) MP ET Mohammed Basheer, BJP MP Atul Garg, Biju Janata Dal (BJD) MP Sasmit Patra, BJP's Rajya Sabha MP and senior advocate Manan Kumar Mishra, BJP leader SS Ahluwalia, and former Ambassador Sujan Chinoy. In a post on X, the Indian Embassy in Congo stated, 'A warm welcome to the All-Party Indian Parliamentary delegation, led by @DrSEShinde, to the DR Congo. Delegation is carrying India's strong message against terrorism to the world! Ambassador V Venkataraman received the delegation.' The all-party delegation led by Shrikant Shinde arrived in Congo after concluded their visit to the UAE as a part of the global outreach under Operation Sindoor. A statement by the Indian Embassy in the UAE said that the visit strengthened India-UAE cooperation in the fight against terrorism in all its forms and manifestations. In a post on X, Indian Embassy in UAE stated, 'The All-party delegation led by Eknath Shinde successfully concludes its highly productive visit to the UAE, further strengthening India-UAE cooperation in the fight against terrorism in all its forms and manifestations.' The delegation aims to brief international partners on India's response to the April 22 Pahalgam terror attack and its broader fight against cross-border terrorism. On May 7, Indian Armed Forces launched Operation Sindoor in response to the Pahalgam terror attack, targeting terror infrastructure in Pakistan and Pakistan-occupied Kashmir (POJK). The Indian Armed Forces responded effectively to subsequent Pakistani aggression and pounded its airbases. The two countries agreed for cessation of hostilities on May 10. (ANI)
India Gazette
24-05-2025
- Politics
- India Gazette
All-party delegation led by Shiv Sena MP Shinde concludes UAE visit
Abu Dhabi [UAE], May 24 (ANI): The all-party delegation led by Shiv Sena MP Shrikant Shinde on Saturday concluded its visit to the UAE as a part of the global outreach of Operation Sindoor. A statement by the Indian Embassy in the UAE said that the visit not only strengthened India-UAE cooperation in India's fight against terrorism. In a post on X, the embassy said, 'The All-party delegation led by Eknath Shinde successfully concludes its highly productive visit to the UAE, further strengthening India-UAE cooperation in the fight against terrorism in all its forms and manifestations.' Shinde thanked the UAE leadership for their support to India in the wake of the dastardly April 22 Pahalgam terror attack. 'As we conclude our visit to the United Arab Emirates, we extend heartfelt gratitude to the UAE leadership for their warm hospitality and unwavering support to India in the global fight against terrorism. The Indian community--our finest ambassadors--shared their anguish over cross-border extremism and welcomed the firm, principled stand of the Government of India under the visionary leadership of Hon'ble Prime Minister Shri Narendra Modi.' He further said that India enjoys immense goodwill in the UAE, strengthened by decades of people-to-people and economic ties. Earlier on Friday, he reiterated India's 'zero-tolerance' stance on terrorism and said that the country is one that retaliates with restraint. Addressing the press, Shinde said, 'Our message is very clear that we won't tolerate terrorism, and if times demand, we will take even stricter steps against terrorism. Terror and trade cannot go together, water and blood cannot flow together - this is an apt message. It is only when Pakistan stops terrorism that we can initiate talks. We are the country that retaliates with restraint.' The group to visit the UAE, Liberia, the Democratic Republic of Congo, and Sierra Leone is headed by Shiv Sena MP Shrikant Eknath Shinde. It will include Bansuri Swaraj (BJP), ET Mohammed Basheer (IUML), Atul Garg (BJP), Sasmit Patra (BJD), Manan Kumar Mishra (BJP), SS Ahluwalia, and Sujan Chinoy. The group is now headed to Democratic Republic of Congo (DRC) to carry forward India's global mission against terrorism. (ANI)
Time of India
24-05-2025
- Politics
- Time of India
All-party delegation led by Shiv Sena MP Shinde concludes UAE visit
All-party delegation led by Shiv Sena MP Shinde concludes UAE visit (Picture credit: ANI) ABU DHABI: The all-party delegation led by Shiv Sena MP Shrikant Shinde on Saturday concluded its visit to the UAE as a part of the global outreach of Operation Sindoor . A statement by the Indian Embassy in the UAE said that the visit not only strengthened India-UAE cooperation in India's fight against terrorism. In a post on X, the embassy said, "The All-party delegation led by Eknath Shinde successfully concludes its highly productive visit to the UAE, further strengthening India-UAE cooperation in the fight against terrorism in all its forms and manifestations." — IndembAbuDhabi (@IndembAbuDhabi) Shinde thanked the UAE leadership for their support to India in the wake of the dastardly April 22 Pahalgam terror attack . "As we conclude our visit to the United Arab Emirates, we extend heartfelt gratitude to the UAE leadership for their warm hospitality and unwavering support to India in the global fight against terrorism. The Indian community--our finest ambassadors--shared their anguish over cross-border extremism and welcomed the firm, principled stand of the Government of India under the visionary leadership of Hon'ble Prime Minister Shri Narendra Modi. " He further said that India enjoys immense goodwill in the UAE, strengthened by decades of people-to-people and economic ties. Earlier on Friday, he reiterated India's 'zero-tolerance' stance on terrorism and said that the country is one that retaliates with restraint. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like They Lost Their Money - Learn From Their Lesson Expertinspector Click Here Undo Addressing the press, Shinde said, "Our message is very clear that we won't tolerate terrorism, and if times demand, we will take even stricter steps against terrorism. Terror and trade cannot go together, water and blood cannot flow together - this is an apt message. It is only when Pakistan stops terrorism that we can initiate talks. We are the country that retaliates with restraint." The group to visit the UAE, Liberia, the Democratic Republic of Congo, and Sierra Leone is headed by Shiv Sena MP Shrikant Eknath Shinde. It will include Bansuri Swaraj (BJP), ET Mohammed Basheer (IUML), Atul Garg (BJP), Sasmit Patra (BJD), Manan Kumar Mishra (BJP), SS Ahluwalia, and Sujan Chinoy. The group is now headed to Democratic Republic of Congo (DRC) to carry forward India's global mission against terrorism.
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Business Standard
24-05-2025
- Politics
- Business Standard
Marked shift in GCC stance on terror since Mumbai attacks: Indian envoy
There has been a marked shift in the Gulf Cooperation Council (GCC) countries' stance on terrorism since the 2008 Mumbai attacks due to the widespread realisation that it is a common enemy of all and there is a need for collaborative efforts to combat the menace, the Indian envoy in the UAE has said. Sunjay Sudhir, India's Ambassador to the UAE, also hailed the visit of the all-party delegation led by Shrikant Shinde to the country to highlight India's stance on the issue. He termed the visit as very successful. "The narrative, our thoughts, our perspectives, were well received, very well reciprocated. And again, it was a clear reciprocation, a clear reiteration of the fact that in the UAE, we have a true strategic partner, a friend, whom we can rely on," the ambassador told PTI. Ambassador Sudhir also highlighted a shift in the response by the GCC nations - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates - after the Pahalgam terror attack in comparison to the response they had shown after the Mumbai attack. In 2008, after the Mumbai terror attack, the situation was quite different. The response of GCC countries was quite different. This time, it was very different. Our leadership was very actively engaged with the UAE, Saudi Arabia, Kuwait and Qatar. It's the same GCC, but some things have changed because of widespread realisation that terrorism is something which is a common enemy for humanity, for mankind, and we need to work together to counter that, Sudhir told PTI. The ambassador said that the UAE was perhaps the first country to issue a clear and categorical statement condemning the attack as an act of terror and calling for the elimination of terrorism in all its forms. The all-party delegation led by Shinde, during its two-day visit, held substantive discussions with senior UAE officials, including Sheikh Nahyan bin Mubarak Al Nahyan, Minister for Tolerance and Coexistence, and Ali Rashid Al Nuaimi, who chairs the Federal National Council Committee on Foreign Affairs, Defence, and Interior. The way the delegation was received and the reciprocation of our perspective reflects the strength of our partnership, Sudhir said, adding that the UAE's response reaffirmed its commitment to countering terrorism as a common enemy of humanity. Reflecting on Prime Minister Modi's stern warning to Pakistan of severe consequences for sponsoring terrorism, the ambassador emphasised that India conveyed to the world that there is a limit to patience. PM Modi has made it clear that there is a limit to patience. We come from the land of Mahatma Gandhi and Gautam Buddha, but nobody can take us for granted, he said, referring to Operation Sindoor as a testament to India's proactive stance. On the broader India-UAE bilateral relationship, Sudhir highlighted the robust growth in ties, particularly in trade, which crossed USD 100 billion in the 2024-25 financial year, well ahead of the target. He pointed to the India-Middle East-Europe Economic Corridor (IMEC) as a flagship initiative, with India and the UAE leading efforts to enhance connectivity, reduce paperwork, and facilitate the movement of goods, data, and clean energy. We are testing a proof of concept for IMEC, which could materialise in the next month, he revealed. Sudhir also noted advancements in fintech, with the UAE's credit and debit card system built on India's RuPay stack, and the local currency trade settlement mechanism boosting confidence in the Indian rupee and UAE dirham.
