India on track to become $5 trillion economy by 2025
India is the fastest growing major economy in the world and is all set to achieve $5 trillion GDP by 2024-25.
Addressing an event organised by industry body FICCI, Union Minister Nitin Gadkari said the government is aiming to boost growth and employment in a sustainable way. The road transport and highways minister said India will play a key role in achieving global Sustainable Development Goals (SDGs) 2030.
Gadkari also said that the country needs to increase its exports and reduce imports.
One of the reasons for optimism is the buoyancy of the jobs market, with a new report finding that Indian start-ups created 230,000 jobs in 2022.
The report, from financial services platform StrideOne, said that the total number of jobs created by start-ups grew at a compound annual growth rate (CAGR) of 78% between 2017-22, and are projected to grow at a CAGR of 24% in the forecast period of 2022-27.
The Indian start-up sector is the third largest in the world after the US and China. India has over 770,000 registered start-ups with the Department for Promotion of Industry and Internal Trade. The combined valuation of the start-ups is over $400 billion.
Ishpreet Singh Gandhi, Founder of StrideOne, said that growth in the sector has ‘unlocked several opportunities in various aspects such as scalability, alternate funding options, and expansion into the global market. It has also enhanced the capacity to create millions of jobs.’
He said: “This meteoric rise of start-ups has made India the third largest start-up ecosystem in the world, this has significantly impacted the Indian economy and showcases the ability to contribute approximately 4%-5% to the GDP of India.”
However, the report also noted that 2022 saw massive layoffs being announced by start-ups and even larger, more established tech companies. Tech giants including Amazon, Hewlett-Packard, Meta, Twitter and others also laid off employees citing prevailing market conditions as the reason.
Beauty and personal care are the fastest-growing segments in India
Two of the fastest-growing sectors in the Indian economy were beauty and personal care, which saw a 76% increase in growth in 2022 compared with the previous year,
The survey from Unicommerce also found that home décor, eyewear and the accessories segment also to have picked up considerably, with volumes growing by 59.2% and 55.7% respectively during the year.
Other positive sectors in 2022 included home appliances and electronics, fast moving capital goods, health and pharmaceuticals.
Kapil Makhija, CEO of Unicommerce, said technology has been an enabler for all the successful sectors. He said: “The all-round growth in the calendar year of 2022 is a result of the improved capabilities of brands and the enablements that technology has been able to offer them.
“Technology will continue to drive business growth, increased efficiencies and enhanced user experience as e-commerce becomes a mainstream channel across all parts of the retail ecosystem. We look forward to continuing to enable the growth of e-commerce in India and beyond.”
The report also revealed that despite the opening up of offline channels, the online market grew by 36% last year. “The continuing and significant growth of e-commerce in a year that had tailwinds in terms of disruption to physical channels (like observed in 2020 and 2021), showcases the changing consumer behaviour and preferences,” the report highlighted.
The report said growth can be attributed to the demand coming from Tier II and III cities which displaced Tier I cities in terms of e-commerce market share. About six out 10 items shipped in 2022 went to Tier II cities.
The data for the Unicommerce report was collected from 500 million orders over a two-year period.
