India’s GDP predicted to increase as business environment improves

According to the Business Environment Rankings by the Economist Intelligence Unit (EIU), India ranks as one of the fastest-improving business environments in the next five years. This progress could lead to increases in real Gross Domestic Product (GDP) per capita growth, investment expenditures, and foreign direct investment (FDI). This article will look into the factors that may collectively make India an attractive location for businesses in the coming years.

World’s fastest growing economy

Over the last two years, India has been the fastest-growing major economy and this is predicted to continue into 2024. Echoing this, the EIU foresees India experiencing a period of rapid economic growth between 2024 and 2028.  

Investment banking firm Jefferies estimates that India’s GDP will climb to US$5 trillion in the next four years and approach US$10 trillion by 2030. The country’s economic trajectory is also expected to lead to it overtaking Japan and Germany, setting it on course to become the world’s third-largest economy by 2027.  

As India moves towards becoming a leading global economy, this could mean more opportunities for businesses. The expected continuation of this growth into the near future means that companies looking to enter or expand into the Indian market may do so with reasonable expectation of stability and growth potential. 

Abundant labour supply

India’s recent demographic milestone of surpassing China to become the world’s most populous nation highlights its labour supply advantage. With over 1.4 billion people, the country is also youthful with approximately 66% of its population under the age of 35. That translates to more than 808 million people. This demographic advantage is critical in the current global landscape, where many countries face the challenges of ageing populations and low birth rates.  

The sheer scale positions it as a pivotal labour market for both domestic and international business operations. Given the vast pool of potential talent, this may make India a prime destination for businesses.

Increasing number of wealthy individuals

India also stands out for its growing concentration of wealth. The country’s millennials, who make up 36% of the population and hold an estimated combined spending power of over US$330 billion, are influencing the residential real estate market. In 2023, they accounted for 54% of homebuyers favouring larger and more luxurious properties.  

Further highlighting this shift in wealth is Mumbai’s emergence as Asia’s new billionaire hub. The financial capital of India now hosts 92 billionaires and surpasses Beijing. According to Hurun Research’s 2024 Global Rich List, India holds the third-highest number of billionaires globally with a total of 271, positioning itself behind New York and London.  

As a whole, this could mean an expanding clientele with substantial purchasing power and investment capacity. While the growth of this wealthy demographic may broaden the consumer base for upscale markets, it can also contribute to capital infusion into the economy and foster further business opportunities.

India in 2024 and beyond

As the nation stands as the world’s fastest-growing economy, it may offer an expanding market with opportunities across various sectors. The abundant labour supply, characterised by a large and young workforce, may provide access to the necessary human capital to fuel business growth. This demographic advantage is complemented by its increasing number of wealthy individuals.  

Together, these factors may boost the business environment in India. If your business growth plans include India, contact us today for professional guidance and support.

Healy Consultants Group provides a wide range of corporate services across the world. Email or WhatsApp us now to find out more about our services.

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