India’s Economic Growth: Projected to Reach $9.82 Trillion by 2035

Indian business could create economic value worth $9.82 trillion by 2035. (AI image)

India’s economy is poised for rapid growth. According to a new report by PwC India, the country’s total Gross Value Added (GVA) is expected to rise from $3.39 trillion in 2023 to $9.82 trillion in 2035. This impressive growth rate of 9.27% per year highlights India’s economic potential.

Understanding GVA

Gross Value Added (GVA) measures the value of goods and services produced in an economy. It is a crucial indicator of economic performance and productivity. GVA is used in calculating GDP after adjusting for taxes and subsidies.

Key Findings of the PwC Report

The report, titled ‘Navigating the Value Shift,’ suggests that Indian companies can achieve a GVA of $9.82 trillion by 2035. This can be done by focusing on nine growth domains instead of traditional sector-specific approaches.

Growth Domains

The report introduces a new framework based on ‘domains.’ These domains cover broad categories of human needs, including:

• Societal living
• Movement
• Care
• Construction
• Power needs

These domains are influenced by climate change, demographic evolution, and technological advancement. Each domain includes multiple industries and promotes cooperation across sectors for comprehensive solutions.

Adapting to Market Transformations

Business leaders in India are actively adapting to market changes. According to PwC’s 28th Annual Global CEO Survey, 40% of Indian CEOs stated that their companies have entered at least one new sector in the past five years. Half of them generate up to 20% of their revenue from these new ventures.

Sanjeev Krishan, Chairperson of PwC in India, emphasizes the need for a structured approach to diversification. This approach should focus on domain-specific strategies rather than sector-based methods. It aims to enhance capabilities, foster ecosystem partnerships, and develop sustainable business models.

Nine Distinct Domains

The analysis highlights nine distinct domains, covering various aspects of production, construction, healthcare, and transportation. For example, the manufacturing and industrial production segment, categorized under “How we make,” could emerge as a significant contributor. It is projected to grow from $945 billion in 2023 to approximately $2.7 trillion in GVA by 2035. This expansion is expected to be supported by technological advancements, automated processes, and a focus on sophisticated manufacturing techniques.

Technological Advancements

The construction, real estate, and infrastructure sectors are experiencing substantial changes due to technological advancements. The integration of intelligent buildings, environmentally conscious materials, and analytics-based management systems shows the evolution towards sophisticated and streamlined built environments.

The telecommunications industry exemplifies the advantages of domain-oriented approaches in fostering development. Telecommunications firms have expanded beyond basic connectivity services. They now support various initiatives, including connected transport, healthcare technology applications, supply chain verification through distributed ledger technology, and the integration of communications networks with power infrastructure. These diverse applications generate additional revenue streams through collaborative partnerships.

Structured Framework for Transition

The report presents a structured framework featuring “glidepaths and guardrails” to assist organizations in their transition into emerging sectors. This framework includes strategic initiatives such as:

• Identifying ecosystem partners
• Addressing capability shortfalls
• Establishing predictive intelligence systems
• Formulating precise market entry-exit protocols

Projections and Methodology

The report’s projections use economic models based on the International Standard Industrial Classification (ISIC). It incorporates data from the IMF, RBI, and the IIASA Shared Socioeconomic Pathway 2 (SSP2). The analysis employs input-output matrices to map sectors to domains, revealing value flow patterns and strongest alignments.

Future Outlook

As India aims to achieve a $30 trillion economy by 2047, PwC’s domain-centered analysis indicates that organizations aligning with fundamental human and industrial requirements will be optimally positioned. These organizations will contribute to and benefit from the nation’s forthcoming phase of balanced and sustainable development.