Moving Towards Global Leadership

India's growth model can withstand a global downturn as its economic growth is largely driven by domestic consumption

- BY NAINA LAL KIDWAI

India has been viewed as an exception and a bright spot in this global downturn. The latest projections by the IMF show that India will remain the fastest-growing major economy in 2022 and 2023. I believe India may be able to escape this global economic downturn.

Services and digital growth: India’s growth model can withstand a global downturn, as we are more dependent on domestic consumption. Moreover our economic growth is largely driven by the services sector and services tend to shrink less compared to manufacturing during global economic downturns, although given the export-oriented nature of IT Services, this will face some headwinds. Further, India has already taken a huge digital leap, and it is expanding digital opportunities in education, energy, health, financial services and logistics, which has the potential to deliver economic value greater than $500 billion by 2025 as per a Ficci-McKinsey report. It is unlikely that a global downturn will slow down the pace of the digital leap for India.

Global exports of digitally delivered services have more than tripled during the last two decades, far greater than the trade in goods, and India stands out as a winner. Global trade in services is expected to remain strong in the future, and India will continue to benefit from the explosive growth in this trade, with its share valued at $0.8 trillion to $1.2 trillion.