scorecardIndia’s growth to mirror China’s trajectory over next decade with private consumption more than doubling to $4.5 trn
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India’s growth to mirror China’s trajectory over next decade with private consumption more than doubling to $4.5 trn

India’s growth to mirror China’s trajectory over next decade with private consumption more than doubling to $4.5 trn
IndiaIndia3 min read
  • India’s next decade of growth would be very similar to China’s path of growth from 2007-2011, said a report by Sundaram Alternate Assets.
  • The report says that India’s private consumption could more than double to $4.5 trillion by the end of this decade.
  • Also, the country’s GDP could more than double from $3.5 trillion today to surpass $7.5 trillion by 2031, it said.
  • The report stated including consumer discretionary, financial inclusiveness, phygital and manufacturing would emerge as outliers in the country’s future growth.
India is at a point where China was 15 years ago in terms of per-capita income and working-age population, giving India a clear demographic advantage in terms of sustaining higher terminal growth rates, said a report by Sundaram Alternate Assets. The report is of the view that India’s next decade of growth would be very similar to China’s growth trajectory between 2007 and 2011.

India as an emerging market has been growing rapidly and is also expected to continue growing at a rapid clip over the next decade or more. Analysts say that Prime Minister Narendra Modi’s target to make India a $5 trillion economy by FY2024-25 is on course to become a reality soon.

The report says that India’s private consumption could more than double to $4.5 trillion by the end of this decade. Also, the country’s GDP could more than double from $3.5 trillion today to surpass $7.5 trillion by 2031, it said.

Four outliers to boost India’s growth journey
India has become the fifth largest stock market in terms of market capitalisation in the world from ranking tenth a decade ago and is poised to become the world’s third largest economy and stock market by the end of this decade.

“Accessing tech solutions have increased dramatically, including low cost payment via UPI and I never thought I would be able to walk out and not have my wallet in place and just going around with my mobile phone. Of course we have already given to the world in terms of tackling Covid, we are the world’s third largest in terms of vaccine production,” said Vikaas M Sachdeva, MD at Sundaram Alternate Assets in a conference addressing points on why India is at a crucial point of growth.

The report stated four major themes -- consumer discretionary, financial inclusiveness, phygital and manufacturing which would emerge as outliers in the country’s future growth.

Under consumer discretionary, the number of households earning more than $35,000 per year is likely to rise fivefold in the coming decade, to over 25 million, shared the report.

Another outlier that would drive growth for the country in the coming years is financial inclusiveness where organized lending companies that lend to the large, underserved population, where the majority opportunity lies would play an important role. These companies have a strong presence in tier 2-3 cities and have secured lending books.

The phygital theme would include consistent growth by companies that leverage tech platforms and online penetration.

On the manufacturing side, sectors with high Indian exports like the specialty chemicals sector, consumer electronics and auto ancillaries will add to the growth journey.

Also, factors like China plus one strategy that has led to countries moving away from Chinese manufactured products and the PLI Scheme that focuses on promoting exports through providing incentives will also play a major role.

Sundaram Alternate Assets is a spin-off of Sundaram Asset Management Company that caters to the investment needs of high net-worth individuals (HNIs).


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