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 and what it means for your businesses—especially as we work to negotiate a free trade agreement.

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 as in the historical context of their transitions.

Until recently, we Indians began to believe a modest 2-3% GDP growth was about all we could expect. And this seemed reasonable, 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 this era of shrinking distances and the revolution in communications, no State can sell status quo as sufficient, 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: 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 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.

The impact of all of this is obvious since each of these processes is underway at scale. This is of course 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 regardless of race, creed, gender or language, from the outset, especially in conditions of poverty.

Since then, much has changed.

Simply put: India is not only the largest and most diverse nation on the planet, it is also the most stable democracy. Not to make a comparison, but since the turn of the millennium, we have had a total of three Prime Ministers, two of whom have led Governments for ten years apiece.

And this is inspite of the most complex and largest electoral exercises anywhere in the world. As we prepare for national elections in a few months, it is instructive to note that the last polls in 2019 were geared around 960 mn registered voters, of whom nearly 600 mn cast voted in over one million polling booths. Results were delivered in one day of counting—not merely because Indians are great at maths, but because we have perfected the use of electronic voting machines. These produce verifiable and accurate resultsever since being deployed solely in 2003. 

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

First, in demographic terms, the participation rate in politics, governance, business and technology is increasingly young—90 million first time voters in 2019—but also fully includes all segments of society: including women and historically disadvantaged communities. Median age is 28 years, and likely to stay at this level for the next 45 years or more.

Second, today’s Indian voice is increasingly less urban, less elite, much more a vernacular and peri-urban voice, thus more authentic.

Third, a more inclusive delivery system. Using technology extensively, the State has exponentially ramped-up its capacity to deliver to all citizens, without exception. Thus the target is now universal access to power, water supply, sanitation, health care, and financial inclusion. In short, to give every citizen everything we lacked in 1947, and then some.

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 344 mn people into the modern banking system (2019), to accurately and directly deliver social benefits to beneficiaries. This is a major driver of demand and consumption and reduce income inequality. In 2014, the world average of banking accounts for adults was 62% of the population. India was at 53%. Today: 80%.

Ladies and gentlemen:

Apart from demography and democracy, the other force transforming Indian society is technology. India is a consistent innovator in using digital innovation to expand development, generate equity in access to market and information, and a more equitable society.

There is precedent. Take our space programme. From the 1960s, it has helped improve agriculture, fisheries, water management, and is now even driving 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. 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, and are building capacity for in-depth manufacture.

One 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.

Here’s how tight the embrace of digitalization is today:

• Today India has not only the second-largest number of netizens, but also the largest number of citizens not on the net. And so, two out of three new people joining the internet are from India.
• India is the largest consumer of data in the world, more than China and the US put together.
• 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—80 added per day--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 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. Growth was 7.2% this (closing) financial year, and 7.3% next year. Capital spending marks a 35.4% year on year increase in FY 2023 and this is rising. All of this in a context where the Indian Rupee has displayed the least implied volatility among EME currencies.

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 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 most countries.

Growth is not merely driven by investment or by trade, important as they are: today, Indian growth is 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, and by the demographic bulge at the 20-40 year segment.

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 will save 7.5 mn tonnes of CO2 equivalent per year; two thermal power plants’ 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, and aim to reach 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, on a base of 327 mn passengers (FY 2023), of which 57 mn travelled abroad.

Ladies and gentlemen,

Growth apart, poverty is also reducing.

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 growth—even though at 1.8 tonnes per capita, our emissions are a fraction of larger economies. Indeed, we met our 2015 Paris Commitment, to reach 40% power from non-fossil sources, eight years ahead of schedule; our target is 50% by 2030, at 500 GW. Even now, 90% of new power added to the grid comes from renewables. We have also pledged to reduce cumulative emissions by one billion tonnes by 2030, and to cut emission intensity of GDP by 45% by the end of this decade.

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.  I need hardly add that reductions in tariff on your whisky and gin will have a significant impact on your sale volumes.

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 JCB shows, 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. Countries such as ours will need to help redesign an order that is more in step with the needs of our times.

Fourth: We share an obvious synergy in R&D, in turning science into innovation, and taking that into 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 for all these reasons, it seems reasonable to emphasize that the UK-India relationship should now be forward-looking, to leverage our respective advantages as (a) innovators; (b) rule makers; (c) agents of growth; (d)drivers of transformation especially in law-based global order; (e) nations with a history of applying disruption as a catalyst of change.

And that, ladies and gentlemen, brings me a closing point. What should matter to you, if you are invested in the world’s future, is that the true benchmark of change in India is, simply put, a tangible sense of confidence and hope—even conviction—among youth that their future will be better. Young Indians believe deeply, profoundly, that their lives will be more comfortable, more productive, and more rewarding than those of their parents. They are proud of their identity; they revel in their history and tradition, but they also 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.