The Indian economy was forecast to record an 11.3% growth in 2021-22, based on prevailing conditions in March 2021. Since then, however, the economic outlook has changed with the start of the 2nd wave of COVID-19. Consequently, a 9.4% growth is anticipated in 2021-22. However, this forecast is subject to changes based on the evolution of the 2nd wave, government responses to the same, and the performance of the economy in the post-lockdown period.
This research service is designed to provide insight into India’s growth trajectory for the next 4 quarters and shed light on the implications of the 2021-22 Budget, the recently launched Production Linked Incentive (PLI) Scheme, and ongoing and impending structural reforms, among other aspects that will highlight the country's near-term economic prospects and outlook.
One of the important ramifications of the global pandemic has been the shift in global supply chains. China’s position as a go-to manufacturing location has weakened, and producers are looking to diversify outside the country. India has emerged as an alternative, and this will fuel the government’s vision of boosting domestic production.
In this regard, the government launched the PLI Scheme in 2020, which aims to attract foreign supply chains. However, India’s attractiveness as an investment destination has been dented in the short term due to a 2nd wave of the virus; nevertheless, investor interest in the country will grow as the number of cases reduces, as central and state governments offer incentives to support manufacturing, and as structural reforms are implemented.
Structural reforms are a priority for the government - evidenced by reforms such as disinvestment and the establishment of bad banks (announced in the recent budget). Mining reforms were also cleared, and they will augment mining production and curtail imports. The government is also working on a national logistics policy that will slash logistics costs.
Some of the key industries that have received a boost from the pandemic include eCommerce and EdTech. eCommerce growth will soon spill over into the B2B space. Furthermore, the cold-chain industry stands to benefit from India’s eGroceries boom and the potential large-scale vaccination program.
Investors should look out for new government incentives to spur manufacturing. It is important to drive economic recovery after the second wave subsides and lockdowns are eased. Opportunities for privatization will open up as the government has indicated a long-term vision of industry-wide privatization, barring a few strategic sectors.
Key Issues Addressed
- What is India’s Q1-Q4 2021-22 growth outlook? How will the country’s growth compare with the growth of the major economies?
- Who are the winners and losers in Budget 2021-22?
- What are the key near-term growth drivers and restraints to the Indian economy?
- How will global trends and events, such as rising oil prices and a change in the US administration, impact India?
- What is the outlook for India’s manufacturing sector?
1. Strategic Imperatives
- Why Is It Increasingly Difficult to Grow?
- The Strategic Imperative 8™
- The Impact of the Top Three Strategic Imperatives on India’s Macroeconomic Environment
- Growth Opportunities Fuel the Growth Pipeline Engine™
2. Growth Opportunity Analysis - Macroeconomic Environment in India
- India’s Macroeconomic Environment - An Overview
- Key Economic Metrics
- Growth Drivers
- Growth Restraints
3. India’s Macroeconomic Outlook
- GDP Growth Outlook
- GDP Growth in the Context of Global Growth
- Budget 2021-2022 - Key Highlights
- Budget 2021-2022 - Key Highlights (continued)
- Global Economic Trends and their Impact on India
- Global Supply-Chain Shifts and the Resurgence of Manufacturing
- State-wise FDI Inflows and Investment Policies
- 2021 Trade Analysis
- Structural Reforms
- Pandemic-driven Industry Winners
4. Growth Opportunity Universe
- Growth Opportunity 1 - New Manufacturing Opportunities will Arise amidst Production Shifts away from China
- Growth Opportunity 1 - New Manufacturing Opportunities will Arise amidst Production Shifts away from China (continued)
- Growth Opportunity 2 - Privatization Opportunities Tied to Structural Reforms
- Growth Opportunity 2 - Privatization Opportunities Tied to Structural Reforms (continued)
- Growth Opportunity 3 - Pandemic-driven Industry Shifts
- Growth Opportunity 3 - Pandemic-driven Industry Shifts (continued)
- List of Exhibits
- Legal Disclaimer