India Inc. confident of achieving US$ 5 trillion economy: Deloitte survey

Changing consumer preferences and strong demand in tier-2 and tier-3 cities are also identified as factors supporting this optimistic outlook

January 24, 2024

Sectors such as automotive, consumer and retail, technology, media, and telecommunication, and energy, resources, and industrial anticipate high growth

The government's focus on initiatives, including positioning the nation as a manufacturing stronghold and advancing the semiconductor industry

Nearly 99% of businesses expect artificial intelligence (AI) to evolve, with 70% of consumer and retail businesses urging government support to regulate AI use

Business leaders stress the significance of global events such as G20 and initiatives to streamline the global supply chain

India Inc. is optimistic about achieving a US$ 5 trillion economy with the central government’s support in infrastructure investments, additional reforms, and increased technology adoption, as revealed in a CXO survey conducted by Deloitte Touche Tohmatsu India LLP. The survey indicates that business leaders foresee robust economic growth in the upcoming fiscal year, with approximately 50% of India Inc. expressing confidence in the country achieving growth above 6.5% in FY25.

Within various industry sectors, high growth expectations are reported in automotive (50%), consumers and retail (66%), technology, media, and telecommunications (47%), and energy, resources, and industrials (44%). The statement from Deloitte highlights that government initiatives, enhanced trade collaborations, reduced logistics costs, and policies promoting industrial production, such as intelligent automation and increased investment in sustainable technologies, will contribute to this positive momentum. Changing consumer preferences and strong demand in tier-2 and tier-3 cities are also identified as factors supporting this optimistic outlook.

Deloitte highlights India’s potential to strengthen its position as a global hub for innovation and research. The government’s focus on initiatives, including positioning the nation as a manufacturing stronghold and advancing the semiconductor industry, underscores the importance of research and development (R&D). Leaders surveyed anticipate significant growth in the semiconductor industry and call for a comprehensive, long-term policy framework to attract investments. About 64% of respondents advocate for R&D support for local companies, and 57% underscore the importance of an effective Intellectual Property Rights framework for industry growth.

The survey reveals that AI is foundational to modern business, offering exceptional growth opportunities. Nearly 99% of businesses expect AI to evolve, with 70% of consumer and retail businesses urging government support to regulate AI use, emphasising adherence to ethical practices in data and methods. Leaders anticipate the government prioritising the implementation of Industry 4.0 technologies, including AI, machine learning, natural language processing, and computer vision, alongside continuous efforts in skill development initiatives, particularly in upskilling and nurturing talent in tier-2 and tier-3 cities.

To foster India’s growth and attract foreign investments, approximately 80% of leaders are focussing on the importance of tax certainty continuity. The survey also highlights readiness to address geopolitical concerns and well-defined mitigation strategies. Business leaders stress the significance of global events such as G20 and initiatives to streamline the global supply chain.

ESG (Environmental, Social, and Governance) initiatives remain a priority, with 100% of respondents reiterating the importance of renewable energy. Leaders expect the government to prioritise investing in ESG strategies and initiatives, followed by technological innovations, infrastructure development, and skill enhancement. Approximately 90% of businesses also desire technological innovation in government processes and operations. The survey highlights global headwinds and ongoing concerns about cost escalation, highlighting the need for strategic measures, targeted skill development, and positioning India as an attractive, forward-thinking economy poised for sustained growth.


Source: Economic Times

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