India to contribute 30% of global GDP by 2040; focus on ‘champion states’ growing at 11% per annum: Amitabh Kant

Highlighting India's structural reforms and the economic near-term outlook, Amitabh Kant, G20 Sherpa for India, said earlier today that analysts are right in estimating that 30 per cent of the global gross domestic product (GDP) will come from India between 2035-2040. Kant estimates that by 2027, India will overtake Germany in Japan in terms of economic growth.

Addressing the Confederation of Indian Industry (CII) Business Summit 2024 in New Delhi on Saturday, May 18, the former chief executive officer (CEO) of government think-tank NITI Aayog, also said that the government needs to work with the states and look at building 12 -13 ‘champion states’ growing at 10-11 per cent per annum.

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India has carried huge amount of structural reforms it has moved from fragile five to top five and has grown at about 8.4 per cent in the last three quarters, according to Kant. He urged Indian companies must start thinking globally to penetrate global markets for accelerated growth. ‘’They should also focus on quality…CII, in the next five years, needs to work closely with the states to making things easier at the state level. If states grow, India grows,'' said Kant.

While speaking to Jamshyd Godrej at the CII Summit, the ex NITI Aayog CEO highlighted that ‘’this was India’s century'' and ‘’we cannot afford to squander it away''. According to Kant, this would require India’s private sector to do focus on the following:

-Enhance size and scale of manufacturing;
-Focus on being champions in sunrise areas of growth;
-Necessary to export and penetrate global markets;
-Use artificial intelligence (AI) across sectors;
-Go green-clean energy transition is critical;
-Focus on quality and research & development (R&D)

He emphasized that the state governments must act as facilitator and catalyst. The next five years are critical for sustaining and accelerating India’s growth story, according to the G20 Sherpa. Kant also spoke on the urgent need to accelerate the adoption of electric vehicles (EVs) in India, highlighting the government's initiatives and the private sector's role in the transformation.

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Amitabh Kant said, “A lot of action is underway in the coming five years.” He acknowledged the massive disruption occurring in the automotive industry, driven by the global shift towards sustainable transportation.

Kant said, "There is a huge disruption taking place and it's important that we accelerate the pace of EVs both in two-wheelers and three-wheelers which account for about 75 per cent of our vehicles and the government has already allocated ₹57,613 crore for procuring 10,000 electric buses."

Kant outlined the expected ripple effects of these investments, forecasting a boom in the manufacturing of electric two-wheelers, three-wheelers, and buses. Noting the role of the Production Linked Incentive (PLI) scheme, Kant said, "So once that gets accelerated, you'll see two-wheelers, three-wheeler manufacturing, buses manufacturing.''

‘’I think the next big ticket thing will be the battery manufacturing for which the PLI scheme has been bid out, and you will see many companies manufacturing batteries from Tata to Reliance to Maruti to Exide,'' added Kant.