India’s economic surge: lessons for SA in navigating growth and opportunity

“THE world is not just watching India, the world is betting on Delhi,” says Prime Minister Narendra Modi.

- JENNIFER REDDY

During my visit to India last year, I noticed its impressive progress in growth and infrastructure.

By surpassing Japan in nominal GDP to become the world’s fourth-largest economy, India has established itself as a significant global economic force.

With an economy exceeding $4 trillion and projections indicating it could soon surpass Germany, India’s growth demands attention from both advanced economies and developing nations like South Africa, which face their own growth challenges.

This achievement did not happen overnight, and was sustained despite sanctions and tariffs that have affected much of the global economy.

India’s economic transformation is the result of sustained structural reforms, strategic investments, and demographic advantages.

Over the past decade, India has recorded some of the fastest growth rates among major economies, even as global markets have struggled with inflation, geopolitical uncertainties, and post-pandemic volatility.

The country has successfully expanded its output while keeping inflation relatively low, a rare combination that has boosted investor confidence and supported domestic consumption.

Significant investments in infrastructure, modernisation of tax systems, targeted manufacturing incentives, and the expansion of digital public infrastructure have collectively transformed the country’s economic landscape.

India’s growth is supported by its vast domestic market, a rising middle class, and a youthful workforce.

Nearly 70% of India’s GDP is driven by domestic consumption.

The rapidly expanding middle class increases demand for goods and services, making it a primary driver of GDP growth.

As consumption has increased, industrial capacity and services output have also expanded. Key sectors contributing to this growth include technology, financial services, pharmaceuticals, renewable energy, and manufacturing.