India's Independence Day: Reflecting on a Nation's Global Ascent
As India celebrates its Independence Day, it's not just an occasion to honor the past but also a moment to reflect on the nation's remarkable journey from a nascent democracy to a rising global powerhouse. With each passing year, India continues to redefine its place on the world stage, fostering economic growth, and championing social progress. Over the past decades, India has not only preserved its rich cultural heritage but also embraced modernity and innovation, making significant strides in various sectors.
Make in India, For the World
One of the most notable success stories of recent years has been the "Make in India" initiative, yielding impressive results, particularly in the manufacturing sector. India has emerged as the second largest manufacturer of mobile phones globally, with value-added mobile manufacturing increasing from 10% to 25%. The Production Linked Incentive (PLI) schemes in strategic industries have been instrumental in boosting Indian manufacturing and production, making the nation more globally competitive.
A cornerstone of the "Make in India" vision is the semiconductor industry. The Tata Group's recent announcement of the launch of India's first semiconductor fabrication plant in Gujarat marks a significant milestone. This development, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), will not only bolster India's semiconductor capabilities but also create a strong foundation for future technological advancements. As industries such as defense, automotive, and energy increasingly rely on semiconductors, India's move to establish a domestic fabrication ecosystem is poised to have far-reaching economic implications.
India's Defence Manufacturing: A New Era of Self-Reliance
The defence sector is another area where India’s indigenisation efforts are yielding impressive results. Reforms in manufacturing and procurement frameworks have ensured that at least 50% of the content in defence procurement contracts is indigenous. This shift not only strengthens India’s defence capabilities but also boosts the domestic economy by encouraging the growth of MSMEs and SMEs that supply these components.
A shining example of India’s defence manufacturing success is the INS Vikrant, the country's first indigenously built aircraft carrier. This feat has not only enhanced India's naval capabilities but also encouraged the ecosystem to continue down the path of defence indigenisation. Today, India ranks among the top 25 arms exporters in the world, with ambitions to climb even higher.
Ease of Doing Business
India's ascent in the global economy is reflected in its remarkable improvement in the Ease of Doing Business (EoDB) rankings – from 142nd in 2014 to 63rd in 2024. This progress is the result of numerous measures across multiple economic sectors.
The implementation of the Goods and Services Tax Network (GSTN) has unified the country's states and Union Territories under one intra-national economic market system. This heavily digitalised system has increased efficiency in trade, boosted tax collections, and decreased supply chain costs.
The Insolvency and Bankruptcy Code (IBC) has been a game-changer, allowing assets to remain viable units and creditors to initiate both liquidation and reorganisation. This has led to increased loan repayments and reduced delinquent accounts.
India’s infrastructure has also seen substantial upgrades, with investments in ports, airports, and freight railways reducing supply chain costs and improving trade logistics. The continuous drive towards digitalisation and automation in tax systems and business processes has enhanced the efficiency of business operations, making India an attractive market for both domestic and international investors.
Startup Nation: A Thriving Ecosystem of Innovation
India’s startup ecosystem has grown exponentially, making it the world’s third-largest, with over 99,000 registered startups. The government’s initiatives to foster innovation and entrepreneurship have created an environment where young enterprises can thrive, generating $450 billion in value, including IPOs and private market valuations. Despite global economic challenges, India continues to attract significant global capital, with $25 billion raised across 1,400 deals in 2022 alone.
The success of India’s startup ecosystem is built on the strong foundation of the country’s IT services industry, which ranks among the largest globally. The synergy between established IT giants and emerging startups has accelerated software development and innovation, offering competitive pricing and high-quality solutions to global markets.
With 800 million internet users and 650 million smartphone owners, India is home to one of the largest digital populations globally. India's distinctive digital journey is characterised by a unique blend of urban and rural dynamics. While urban centers continue to drive consumption, rural and semi-urban areas are rapidly embracing digital technologies, creating a multi-layered market with immense potential. The convergence of technological advancements, such as the Goods and Services Tax (GST) and the India Stack initiatives, has formalised business operations and accelerated the growth of B2B enterprise applications, making India a hotbed for innovation and entrepreneurship.
India's Public Markets and the Startup IPO Boom
India's public markets have demonstrated a sophisticated and discerning approach to startup IPOs over the past few years. With the influx of liquidity from SIPs, pension programs, and institutional allocations, the Indian markets have provided a reliable foundation for the growth of new-age companies. The hunger for high-quality growth ideas is evident, with the markets accepting an IPO every 22 days and rewarding startups that demonstrate consistent revenue growth and credible business models.
As India continues to attract global capital, the public markets are set to play a crucial role in the nation's economic trajectory. Startups that can present a compelling growth story, with a focus on profitability and long-term expansion, are likely to receive a warm welcome from the IPO markets. This dynamic is expected to drive the next wave of innovation and growth in India's startup ecosystem, further solidifying the nation's position as a global economic powerhouse.
As we reflect on India's achievements this Independence Day, we celebrate not just the past, but the immense potential that lies ahead. The spirit of innovation, entrepreneurship, and resilience that has brought India this far will undoubtedly propel it to greater heights in the years to come.
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