Pooja Chhabria
From the economy to the energy transition, India's action on crucial global issues was a major topic of discussion at the World Economic Forum's Annual Meeting 2023 in Davos, Switzerland.By 2035, India will become the third $10 trillion economy, the Center for Economics and Business Research (CEBR) predicts.
Here are five highlights on India from this year's Meeting, which saw participation from key government and private sector leaders.
This year's World Economic Forum Annual Meeting saw leaders from around the world come together to discuss various aspects of the cascading and connected crises that threaten a polycrisis.
There's the war in Ukraine, which has sent energy and food prices soaring. The resulting inflationary pressures have ignited a global cost-of-living crisis, leading to social unrest. On top of all that, carbon emissions continue to rise as economies reopened after the pandemic.
None of this has had an impact significant enough to derail India's growth, as reflected in responses from political and private leaders at Davos. From the economy to the energy transition, India's action on crucial global issues was a major topic of discussion at Davos 2023.
Missed the sessions? Here are five highlights on India to get you up to speed.
On economy: India's 'high growth, moderate inflation’ strategy
The economic outlook for 2023 differs depending on where you are in the world, according to the World Economic Forum’s Chief Economists Outlook.
According to the survey, economists are most optimistic about the Middle East and North Africa (MENA) and South Asia. The report suggests that some economies in the region, including Bangladesh and India, may benefit from global trends such as a diversification of manufacturing supply chains away from China.
The view aligns with predictions from the London-based consultancy Center for Economics and Business Research (CEBR), which says that India will become the third $10 trillion economy by 2035.
More than half of India’s population, which is estimated to have already overtaken China’s, falls in the working age group of 15-64 years—the segment known as the demographic dividend. Can it use this demographic dividend in its stride?
On a panel discussing ‘India’s Road to a $10 Trillion Economy’, Ashwini Vaishnaw, the minister overseeing Railways, Communications, and Electronics and Information Technology, highlighted four key factors that will make all the difference: ‘The first dimension is to make sure India’s economy is resilient, and there is consistent 6-8% growth rate for a complete decade with moderate inflation.”
Second, as the world moves towards resilient supply chains, India must figure out how to ‘attract a large number of supply chain participants’ while using local research and development capabilities. The third and fourth cover areas of energy transition and digital transformation.
Vaishnaw says India has been able to achieve ‘high growth, moderate inflation’ despite global economic turbulences.
Others on the panel included Smriti Zubin Irani, Minister of Women and Child Development, who highlighted India’s move towards 'human-centred globalisation', and Natarajan Chandrasekaran, Chairman at Tata Sons, who expressed optimism at the country’s positioning as 'an alternate, resilient supply chain for the world'. Watch the full session here.
On energy transition: Top priority with India's G20 presidency
India has sizeable and growing energy needs, and with this, comes the risk of rising greenhouse gas emissions (GHGs).
The country has been at the forefront of driving global action on climate change, writes Viraj Mehta, Head of Regional Agenda, India and South Asia, at the Forum. He says the establishment of a National Hydrogen Mission is particularly noteworthy.
During 2022, extreme weather events were recorded in India during 80% of the year, underlining how much the country is already suffering the effects of climate change.
It has pledged to reach net-zero emissions by 2070 at COP26, and Raj Kumar Singh, who oversees the Ministry of Power and the Ministry of New and Renewable Energy, believes it’s right on track.
“India is the only major economy whose energy transition is consonant with a sub-2 degree rise in global temperature. We achieved our NDCs nine years in advance – we had said that we’ll have 40% of our capacity coming from non-fossils by 2030, and we achieved that in 2021.”
In August last year, it was reported that India has submitted its updated Nationally Determined Contribution (NDC) - climate action targets - to the UN climate change body, promising that the country would achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. Kumar told the panel at a session on The Interplay of Food, Energy and Water, that he is confident of crossing that target.
On reducing the emissions intensity of its Gross Domestic Product (GDP), which is a measure of the amount of greenhouse gas emitted per unit of economic activity, the minister said India has already reduced the intensity by 30%.
He did not comment on the updated pledges made by India to reduce the emissions intensity by 45% by 2030. It had earlier set a target of a 33-35% cut before COP26.
The country has made huge strides in improving energy access but needs to continue to develop the energy network and diversify its fuel mix.
Energy and climate change mitigation are among India’s priorities as it takes on the mantle of G20 leadership until November this year.
On resilient technology: 'Digital vision being implemented in India'
Technological changes across industries was a huge topic of discussion at this year’s Meeting. One panel on ‘Technology for a More Resilient World’ explored the role of technology in the transition to a cleaner, safer and more inclusive world.
There’s a palpable excitement brewing amongst Indian leaders in technology, according to Sunil Bharti Mittal, Chairman at Bharti Enterprises. “India is certainly on the move. Almost every segment of our economy is moving very well, consumption is going up.”
“China+1 has become the norm in the world: everybody is talking about being in India in addition to China, not necessarily in replacement to China. Europe+1 has started to be talked about.. because they feel India could become a very important part of the supply chain of the world.”
Mittal believes the ‘digital vision being implemented in India’ has helped overcome and mitigate the absence of hard infrastructure. “We’ve been able to do our business without massive development of roads, ports, airlines, railways – which are on an accelerated path, but for a country like India, will probably take 10-15 years [to develop].
India is certainly on the move. Almost every segment of our economy is moving very well.”— Sunil Bharti Mittal, Chairman at Bharti Enterprises
He went on to expand on the rollout of 5G services in India but said its use case is still limited. “The most benefit of 5G will come from industrial application, and that’s what we’re most excited about”.
“In the meantime, people will get used to high speeds and low latency for regular devices as well.”
On the question of how much India has benefited from the tech tensions between the United States and China, Mittal pointed to a renewed focus on manufacturing capability. “India is now committed to spending very large amounts of money over the next 5-10 years to finally attract the semi-conductor base, which we could never build over the last several decades.
Microsoft’s growing operations in India are an example of the integration that the United States wants to see, NYTimes reported late last year, while highlighting the administration’s effort to help the world’s solar industry move away from China.
For more on how ChatGPT is being utilized to benefit farmers in India, tune into the conversation with Satya Nadella below as he recalls a recent visit to the country.
On gender parity: Empowering the Global South
As G20 Chair, India has identified women-led development as one of the high-priority subjects and created an engagement group Women20 focused on gender equity.
To bridge the gender gap, India's Minister of Women and Child Development, Smriti Zubin Irani, says we need to recognise that we won't have a 'one size fits all solution'.
"Do we reduce women to only consumption of technology? Or do we want to support them to become leaders of technological institutions or enterprises? The G20 presidency gives us a unique opportunity to speak about our experiences, speaks about our commitment," she says, while helping empower the Global South.
During a session on ‘The $11 Trillion Opportunity in the Care Economy’, Mirai Chatterjee highlighted ‘one of the big issues’ plaguing India: the falling female workforce participation rate. “Our policymakers are extremely concerned about that – and that is one opportunity for promoting [child] care,” said Chatterjee, a social worker and chairperson of the Self-Employed Women's Association, SEWA, which is a union that helps almost 2 million members in India obtain work and income security, financial services and primary health care.
She established the critical link between the two: “If women don't have basic care services infrastructure, they simply cannot work.”
“During the COVID-19 pandemic, women faced a lot of stress because when men could get back to work, women couldn’t until much later – childcare centres were shut, and there was no support for their care work. In fact, 85% of women in a microstudy we did, said that they couldn’t go back to work after the pandemic because there simply wasn’t that kind of support.”
On the other hand, she says, women reported ‘peace of mind’ when they had support, and while ‘it’s good for the families, it’s also good for our economies’.
She added that a solid social case exists for building a well-functioning care economy. “If we want to reduce gender inequalities in every country of the globe, then this is the way to go: invest, invest, invest.”
On climate adaptation: Building a vulnerability index
For developing countries dealing with the consequences of climate change, adaptation costs could reach $300 billion a year by 2030 to provide support and build solutions for vulnerable communities.
Parameswaran Iyer, chief executive of the Indian government’s think-tank National Institution for Transforming India (NITI) Aayog, stepped in to inform adaptation efforts of the country.
“Water and climate are closely connected, and if you look at water, it’s either too little or too much or too polluted, so you have floods, droughts and pollution of groundwater. We are a water-scarce country… so how do we adapt to this?”
“Increasingly, there’s a focus on how to build resilient infrastructure, and water is just one example. But we have started identifying the most vulnerable areas, cities, coastal areas, food and agriculture, and infrastructure so that we can prioritise areas for adaptation. So, it’s important to have a vulnerability index.”
He cites the example of the northern state of Uttar Pradesh, home to about 250 million people. “They’ve embarked on an ambitious adaptation programme, and it’s a little bit of mitigation as well.
“How do you get farmers to move into more resilient and sustainable practices for [growing] rice? Instead of using flood irrigation, they are now moving to direct seeding of rice, which [utilises] less water but also gives you more productivity and provides the farmer with a high income - you have to take care of the weeds, of course. That’s a big challenge, but that’s one example of how adaptation is taking place at scale.
On climate financing, he emphasised the importance of capacity building alongside technology transfer. “Climate change has to be looked at holistically, and in India, we are cognizant of the reality of the ‘now’, and we are acting on it, and hopefully this message can resonate in the G20 as well.”
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