The Australia India Chamber of Commerce (AICC) has reported on India's transformation across multiple sectors, from skills development and economic growth to booming industries like space tech, food processing, and online retail. With strategic government initiatives, a vibrant startup ecosystem, and robust economic forecasts, India is positioning itself as a global leader in innovation, workforce development, and economic growth. Here's a summary of what we saw in August.

India’s Strategic Push for Skills Training

The Indian government is prioritising skills training, recognising its pivotal role in shaping the future workforce and economy. The Ministry of Skill Development and Entrepreneurship (MSDE) has initiated consultations with states and industry associations across sectors to launch a new scheme aimed at empowering 2 million youth with new-age skills. With a massive investment of US$ 7.15 billion over the next five years, this initiative seeks to revamp 1,000 Industrial Training Institutes (ITIs), making them hubs for critical skills development in sectors such as construction, green energy, textiles, advanced manufacturing, heavy engineering, automobiles, electronics, and telecom.

A core feature of the plan is the development of 200 hub ITIs and 800 spoke ITIs through a challenge-based selection process. The hub ITIs will focus on short-term courses tailored to industry needs, while the spoke ITIs will provide essential infrastructure. Additionally, five National Skill Training Institutes (NSTIs) will undergo capacity augmentation to support pre-service and in-service training for 50,000 ITI trainers, ensuring quality education and training across the country.

This initiative addresses the previous financial shortfalls that hampered ITI upgradation, providing comprehensive infrastructure improvements and expanding capacity for new-age trades.

A Rapidly Growing Economy

According to the International Monetary Fund (IMF), India is on track to become the third-largest economy by 2027. Dr. Gita Gopinath, IMF Deputy Managing Director, noted that India’s recent growth exceeded expectations, with a strong recovery in private consumption contributing significantly to this outlook. Rural consumption, bolstered by strong two-wheeler sales and improvements in the fast-moving consumer goods (FMCG) sector, played a key role. Positive monsoon seasons and better harvests have further boosted agricultural incomes, supporting rural consumption.

The IMF projects India’s growth rate for FY25 to be 7%, driven by a combination of factors, including enhanced agricultural output and a continued rise in private consumption. This optimistic forecast underscores India’s potential as a global economic powerhouse.

The Challenge of Employability

Despite India’s economic success, the challenge of preparing its young population for the workforce remains significant. According to an analysis by the Trade Promotion Council of India (TPCI), over 50% of Indian graduates lack the skills required to find employment. This highlights the importance of the MSDE’s new skills training initiative, which aims to improve overall work and employability skills, thereby bridging the gap between education and employment. Join our Education & Training National Industry Group.

The Surge of Indian Startup IPOs

Indian startups are riding a wave of momentum, with a surge in initial public offerings (IPOs) in 2024. In just over seven months, 10 new-age tech companies, including Go Digit General Insurance, FirstCry, and Ola Electric, have listed on the stock exchanges. This marks a significant increase from the five startups that listed in 2023 and the three in 2022.

What is driving this trend? The answer lies in the thawing funding winter, a renewed focus on profitability, and a growing appetite from investors for startup IPOs. Additionally, major players like Swiggy are gearing up for market debuts, signalling continued growth and confidence in India’s startup ecosystem. Join our Technology, Innovation & Startups National Industry Group.

The Expanding Domestic Food Market

India’s domestic food market is also experiencing substantial growth. According to a report by the Confederation of Indian Industry (CII), supported by Danfoss India, the food market is projected to expand by more than 47%, reaching US$ 1,274 billion by 2027. The report highlights the increasing role of technology in food processing and the significant potential for growth in the southern states, particularly in Tamil Nadu, which has become a leader in exporting processed fruits, juices, and nuts. Join our Agribusiness National Industry Group.

A Booming Space Tech Industry

India’s space technology sector is emerging as a key area of growth and investment. With projections indicating a market opportunity of over US$ 77 billion by 2030, growing at a remarkable compound annual growth rate (CAGR) of 26%, India’s space economy is set to play a critical role in global space exploration. Although India currently accounts for only 2-3% of the global space economy, there are ambitious plans to expand this share to over 10% by 2030, driven by both governmental and private sector initiatives. Join our Space & Spatial National Industry Group.

The Future of Online Fashion in India

India’s online fashion and lifestyle market is also poised for significant growth. A report by Bain & Company and Myntra projects that the market will expand from US$ 16-17 billion to US$ 40-45 billion by 2028. E-commerce penetration in the lifestyle sector is expected to rise from 13% to 18-22%, meaning that nearly one-fifth of lifestyle spending will occur online. GenZ consumers are leading this charge, averaging 8-9 online shopping transactions per year, further fuelling the expansion of India’s online retail sector.

---

Stay up to date with India trends that will affect you. Join the Australia India Chamber of Commerce (AICC) today.