Ladies and Gentlemen,

Thank you for this opportunity to talk to a topic I believe matters to you—and hopefully, your company’s bottomline and thus, your wallets.

And that in short, is the economic transformation underway in India.

What is underway in India is as much a generation-defining process as the one in China in the ‘naughties. Of course, it is different in form and appearance, because, obviously, the two countries are quite different in form and structure as well.

But here’s the proposition: in many senses, what is underway in India could be even more consequential. There are many reasons for it, but one is quite simply because we live in a very different—more uncertain—era than the unipolar moment of the 1990s. And another is because the India story is uniquely different from the Chinese trajectory, because it takes place within a democratic context.

And yet India has never been immune from sceptics: for years, it was a given that India would always be a ponderous, lumbering elephant—making progress, but slowly: the promising nation that only promised to do better. Indeed a cable to the State Department dated 28 December 1971–12 days after Indian military and the Bangladesh Mukti Bahini had liberated Bangladesh—a US Embassy official described India thus:

...an oversized political entity, lacking cohesion with massive economic and social problems, which threaten its viability and preclude its ability to wield power effectively and entail the provision of endless external assistance. Evidently, White House strategists view India much more as a drainpipe than a fountainhead….

The thing with reading snark often enough is that even the subject of begins to believe it. Thus even Indians began to believe a modest 2-3% GDP growth was about all we could expect. And this was not unreasonable, given our vast population, our staggering diversity, and the enormous challenges at every turn. Certainly we believed that as the most complex society in the world, just staying together was a feat that was miraculous enough. Of course that was, and is still true.

But that was never going to be enough. In our era of shrinking distances and the revolution in communications, no State can sell status quo as a good thing, especially not to the youth. As our world shrank to a palm-sized screen, aspiration grew and with it, impatience, especially among India’s youth, several hundreds of millions of them. No nation, certainly not a country as complex as India, could wait for change to happen.

And so it is that the pace of change began to accelerate, first steadily in the ‘noughties, and now, this past decade, tangibly, palpably so.

In short, India is changing at a pace and scale that is wide-ranging and deeply transformative. It is not an exaggeration to say that change today is actually leading India toward the right velocity to escape the scourges of chronic illnesses, poverty and deprivation. We may not be there yet, but the vision of a developed India in 2047 no longer looks like a moonshot—a simile that is advisedly chosen. Indeed, in the three-quarters of the century since India re-emerged as an independent nation, it is changing faster than ever before.

And it is doing so within a framework of entrenched democracy.

Let me focus on three key verticals of progress: the digitalization of governance; the effort to increase manufacture in India including by building the hard infrastructure to support it; and how this impacts upon India’s position in the world. In turn, in this more enlightened age of concern for the sustainability of our planet, I will also try to talk about how India seeks to achieve development in a manner that is least detrimental to the global environment.

Each of these processes is underway today at scale in India. You may well argue that this is easy to say, since India is the land of big numbers. But what makes the process more remarkable is the low starting base. Consider India at its midnight tryst with destiny in August 1947. It had:

A population of 340 mn, with:

• 90% of whom languished below the poverty line;
• A life expectancy of 30 years, blighted by chronic disease and malnutrition.
• Low literacy rates, at around 16%, and only 17 universities.
• Minuscule economic growth, at 1% annually, for forty-seven years since 1900, while population grew at 3.5%.
• Barely any industry, hardly any electric power production; and endemic food, health care and transport shortages;

But what we did have was a remarkably forward-looking Constitution, drafted and adopted in just over two years of independence, and a vibrant—indeed even noisy—democracy.

And remember, no nation in the world—not even in the West—was a democracy for all its people initially, especially in conditions of poverty.

Since then, much has changed. Social progress first. 

First: Democracy continues to flourish in India. This is simply because it is embedded deeply in the DNA of India. Diversity—linguistic, cultural, religious and even social—makes it inconceivable to any Indian citizen that there could be any other way of governing India. Is it a quiet, social conversation-based democracy? Certainly not. Democracy in India is an Indian-style street pageant: noisy, colourful, often fractious, diverse in its opinions but always certainly democratic.

Take elections: a hardy perennial of Indian daily life. The last national election in 2019 had 960 mn registered voters, of which nearly 600 mn cast their franchise in as many as one million polling booths. Results were delivered in one day of counting—not just because Indians are great at maths, but because we have perfected the use of electronic voting machines. These produce accurate results ever since they were deployed for all elections in 2003. 

Not only do our polls produce winners and losers—as all do—in our case, as in the UK, there is full acceptance of results. Outcomes in States and the Union over the past decade since the last general election illustrate that each time, the people have had their say. As we will hear later this coming summer.

And of course, in India, both our Houses of Parliament are elected.

Of course, there is more to democracy than merely elections.

Take institutions. We have an independent judiciary that has repeatedly exercised independence not just in rulings, but also in the most crucial area of all: selection of judges, a power that vests in a Collegium run by the judiciary. And not in the Government of the day.

This is also the case with civil service and the Armed Forces. In both, recruitment is through an open competitive exam, managed by a Constitutionally-appointed Union Public Services Commission. Some 1.1 million appeared for the exam in 2022, and less than 950 were selected.

On this baseline, as it were, what change is India experiencing?

First, in democratic terms, the participation rate is increasingly not only young—90 million first time voters in 2019—but also fully includes all minority groups, women and historically disadvantaged communities.

Second, the rise of vocal non-urban, non-elite groups. It is increasingly clear that the voice emanating from India is more diverse, and arguably, more authentic as it represents a larger segment of the population.

Third, in terms of social delivery, the State has exponentially ramped up capacity to deliver services to all citizens, without exception. This includes both federal and State administrations. The focus has been on universalizing delivery of power, water, sanitation, primary health care, affordable energy for households, and financial inclusion.

In less than ten years, we have succeeded in:

• Ensuring nearly 100% electrification of the entire country, including villages and remote regions, in 2019;
• Extending piped drinking water to 49% of India’s households (or 81 mn) up from 17% of households, or 32 mn, in 2018;
• Ensuring basic sanitation for over 88% of households, up from 50% just a decade ago.
• Bringing some 344 mn people into the modern banking system (2019), so that digital technologies can be used to more accurately and directly deliver benefits to beneficiaries. This is a major driver of demand and consumption. It also helps reduce income inequality. In 2014, when the Government launched schemes for financial inclusion, the world average of banking accounts for adults was 62%. India was at 53%. Today it is well over 80%.

And technology is energizing and empowering our youth as never before. Social acceptance of diversities of modern society is widening—as is reflected in India’s popular culture. You only need to see how Bollywood now treats same-sex relationships—criminalized in the colonial era, sustained as such upto 2018—to see that India is changing in ways that are unprecedented. While I readily accept that this is a work in progress, India is changing faster than at any other time in its history.

Ladies and gentlemen:

Coming to governance, the single biggest force transforming Indian society is technology. India is a consistent innovator in using the digital domain to expand economic development, facilitate ease of access to market and information, and a more equitable society.

There is precedent. Take our space programme. The Indian Space Research Organization made a case for its existence and funding by focusing first upon developmental benefits of space capabilities. These included remote-sensing for meteorology—which helped reduce death rates from extreme climate events to near zero. It has helped us improve agriculture, fisheries, water management, and now even spatial planning and project execution. We now have end-to-end capability including highly cost-effective launch services, satellite bus design, payload design, tracking and telemetry, and as the landing on the south pole of the moon shows, full capabilities in managing space-based assets.

And all at a cost less than a Hollywood blockbuster.  I mean that literally. The 2013 Alfonso Cuaron movie Gravity cost around $130 mn to make.

Our last lunar mission? US$ 75 mn.

Or, using a metric cost-conscious Indians recognize: it cost 5 US cents, or 4.4 Indian Rupees per km for ISRO to get their lander—named, incidentally, Vikram—to the south pole of the moon. A tuk-tuk in Delhi costs Rs 11 per km, or about 13 cents.

More seriously, in general, India has been very focused on leveraging technology as an agent of disruptive change. And this bet has been hugely successful. Consider: in July 2015, when the government launched its flagship Digital India campaign, only 19% of the population was connected to the internet, and a mere 15% had access to mobiles. In terms of per capita data consumption, India stood 122nd.

But this programme captured the public imagination. Currently, India has over 900 million internet users; India added 47 million internet users between 2021 and 2022 alone. 

But there’s more. In 2023, India crossed 1.20 bn mobile phone users, or over 81% of the population, a jump of 34 million on 2022. And from importing 98% of mobile phones, we now export mobile phones—largely assembly, but we intend to have capacity for in-depth manufacture.

A driver of ubiquitous use is data pricing. It is a fraction of the cost here. In 2019, the cost of 1 GB of data in India was £0.20. But since 2019, the cost fell to £0.07 per GB. According to industry sources here, the average price per GB for data here is £1.10.

This digital leap has facilitated the rise of tech-based digital goods to facilitate the target of improved ‘ease of living’ for the largest possible number of our citizens. Here’s how this is working today:

• Today India has not only the second-largest number of netizens, but also the largest number of citizens not on the net. Even now, two out of three new people joining the internet are from India.
• And today, India is the largest consumer of data in the world, more than China and the US put together.
• 3 bn unique biometric identity cards have been issued in India, in the democratic world’s largest such exercise.
• Fintech is exploding: In 2022, India alone recorded 74 billion transactions, worth $ 1.6 trillion. The second-ranking country logged 18 billion transactions. And our numbers are accelerating: in 2023, total transactions went up to 117.6 billion, and the value crossed $2 trillion.
• Startups have been turbo-charged by this digital transformation empowering tens of millions of young people. And so, we not only host the second-largest number of startups in the world, we also have the third-largest number of unicorns. Even better, we have the fastest rate of adding unicorns per day: in 2022, one unicorn was added every nine days.
• And the Government is doubling down: our recent Budget sets aside £9.5 bn for a corpus to offer 50-year interest free loans for young people to invest in sunrise tech sectors like AI

Ladies and Gentlemen,

How is this impacting upon India’s economy? Put simply, today India is the largest and most exciting economic opportunity in the world.

India’s GDP is around $3 tn. It took us 67 years to take our GDP to one trillion. It took a further eight years to move from one to two trillion. But as we have seen, the third and most recent trillion-dollar addition to our GDP took five years. Our GDP is now the fifth largest in the world.

And of course, modesty forbids emphasizing whom we just overtook.

And our goal is to take the economy to the $10 trillion mark by 2030 and to $32 trillion by the centenary of our independence, in 2047.

Today, India is the fastest growing major economy on the planet. The World Bank estimates growth at 6.4% this year and 6.5% next year

If it makes sense to follow the money, then the world is beating a path to India’s door. Consider: the total FDI India received since independence was US $ 932 bn, but US$ 532 bn of this reached in just the last eight years. And investment is being collected from 162 separate countries, entering 61 separate sectors—a greater level of sectoral and nationality-based diversity than in any other country. Given our federal system, it is interesting that FDI is flowing not just into a few chosen states, but into 31 separate States, all of whom compete to offer the best terms.

Trade has also risen, with exports breaking through the artificial ceiling of $400 bn. Indeed, India has remained connected closely with the world, as we struck Free Trade Agreements with Singapore, Korea, Japan, ASEAN, Australia and UAE. And we are working on an FTA with not only the UK, but also with the EU, EFTA (almost done), and GCC.

But it isn’t just trade driving growth: it is primarily driven by domestic demand—67% comes from within. And here too, this is increasingly from the rise in consumption in rural and peri-urban areas.

It is also driven by the extraordinary youth bulge, as India is, and will remain for decades, the planet’s home for young people, at an average age currently of around 28 years. And our youth are driving Indian entrepreneurship, through startups, new businesses, and innovation.

All of this is underpinned by a long-overdue focus on infrastructure. Take metro railways. Our first subway was built in Kolkata in the mid 1980s, but it did not really drive mass transit—until the Delhi metro in the late 1990s. Today India has 15 cities with operational metro projects. The Delhi Metro has a route length of some 348 km with 230 stations, a punctuality rate of 99%, and profitable operation at fares set at £0.20 for 5 km. Indeed, some cities have even cheaper and newer networks: Nagpur charges £0.05 for a single journey. And we aim to secure a seven-fold growth in urban railways by 2047.

So too for railways. Even with the largest route length in Asia, at over 70,000 km, we have completed 100% electrification of rail routes in 14 major states, and are on target to fully electrify and move all rail operations to net zero emissions before 2030. The current electrification rate compares favourably with France, at 59%, and the UK, at 34%. We are also deploying solar power at stations—960 have rooftop solar supporting power supply. This would save 7.5 mn tonnes of CO2 equivalent per year, or two thermal power plants’ worth in emissions.  

It isn’t just railways. Even India’s road network is changing fast. Today we are building upto 50 km of highways every day, on a base that exceeds 145,000 kms: we hope to double that by 2047. We now have nearly 150 airports, with a target of reaching 220 by 2025. Two of our airlines announced record-breaking purchase orders, over 500 and 400 aircraft each, the largest and third largest orders in the world. And passenger traffic is growing at 25% year on year, that too on a base of: 327 mn passengers (FY 2023), of which 57 mn travelled abroad.

Ladies and gentlemen,

It could legitimately be asked: is growth all there is? Quite so. But the good bit is that poverty—a searing indictment on our collective conscience—is also reducing more sharply than ever before.

The IMF estimates that absolute poverty is down effectively to zero. And the UNDP estimates that some 415 mn people have been lifted out of poverty between 2006 and 2019. This is a remarkable achievement, especially as consumption inequality has reduced to to its lowest levels in 40 years, with the Gini Coefficient at 0.294. That said, there are still significant pockets of relative poverty, which remains a substantial task. Our goal is to raise per capita GDP of India nearly ten-fold by 2047, to over $20,000, while stabilizing population growth and investing significantly in health, education and the social sector.

Reduction of poverty is matched by a nationally-driven effort to reduce the carbon intensity of India’s growth—even though at 1.8 tonnes per capita, India’s emissions are a fraction of larger economies. Indeed, we met our 2015 Paris Commitment, to reach a 40% share of power from non-fossil sources, eight years ahead of schedule; this will reach 50% by 2030, at 500 GW. We have also pledged to reduce cumulative emissions by one billion tonnes by 2030, and to cut emissions intensity of our GDP by 45% by the end of this decade. Of course, all of this will cost, and here’s where you will, I hope, come in!

There is sometimes speculation about India’s commitment here. Since we recorded extreme climate events, in one form or another, in nearly 80% of India in 2022, it is fair to say that no-one gets this as much as we do. This realization was reflected in India’s G20 Presidency theme, with the tag-line, ‘one earth, one family, one future’. The outcomes make it clear: humanity is inextricably interlinked, not least by suffering, but also by the need to address the effects of climate change.

And it matters to every one of you here. Let me explain why:

First: the obvious reason. A successful India is an obvious partner for a Global Britain, including as a market. Take the case of whisky. India is among the top importers of Scotch whisky by volume. We imported around 219 million bottles of whisky in 2022. But in that time, our thirsty consumers polished off 2 billion bottles, or over 1.5 billion litres. 

Second: geoeconomics. COVID showed us the need for reliable and resilient value chains of production. While re-shoring is an obvious attraction, not every link in every product or service chain can be entirely re-shored. Hence the value of friend-shoring. As Foxconn is showing, through the rapid expansion of its presence in India.

Third: Reworking of the global order. It is obvious that we are now at a hinge moment for the post-war global order. While it is true that the post- 1945 system guaranteed, at a minimum, an absence of world war, and at best, space for the extraordinary rise of the Indo-Pacific, it is increasingly not fit for purpose. The system that will take its placewill require to be designed by countries such as ours, especially because we are both invested in the existing order.

Fourth: We share an obvious synergy in R&D, leveraging our competences in science into innovation, translational science and market production. The COVID vaccine story was one such success: some 80% of the 3 bn doses of the Oxford vaccine were produced by one company in India.

Fifth: Services. While this appears to be a sector of competition, there is actually a high level of complementarity. Legal services, translation services, financial services, telecom and IT services etc are not only points of commonality for structural reasons: the mere fact that India has the second-largest collective of English speakers is an obvious link.

Sixth: and obviously not in that linear order: political impact. Obviously, if India raises hundreds of millions of its people into prosperity with a modest impact on our earth, in a democratic framework, there is a beneficial impact for the West internally and externally.

And that, ladies and gentlemen, brings me a key point. What should matter is that the true benchmark of change in India is more intangible than anything statistics can tell you. And that is, put simply, a visible sense of confidence and hope—even conviction-- that the future will be better. Young Indians believe deeply, profoundly, that their lives will be more comfortable, more productive, and more rewarding than that of their parents. They are proud of their identity; they revel in their history and tradition, and they believe that the future is in their hands. An extraordinary sense of confidence is visible everywhere: in India’s streets, offices, its festivals and its institutions. And it has to be seen to be believed. Because the India at hand is truly Incredible.

Thank you very much for your patience.