India as a $10 trillion economy was a dream that was shown to every countryman by our Prime Minister Shri Narendra Modi a few years ago. Our leader’s vision included making India the third largest economy, a haven for start-ups and a world leader in electric vehicles and energy storage devices. If we assess our country’s standing today vis-à-vis back then, the momentum at which we are growing, it’s no surprise that this dream will soon be a reality.

According to the report of the Centre for Economics and Business Research (CEBR), the Indian economy will hit the $10 trillion mark by 2035. With the introduction of dynamic initiatives, backed by proactive policy reforms, India is fast becoming one of the world’s leading economies. Last year, the Indian economy overtook the United Kingdom's in terms of size, making it the fifth largest globally.

Optimism around India continues at a time when the world faces a prospect of an imminent recession speaks volumes of our country’s progress. Owing to the easing of laws and compliances, India has consistently been recording high annual FDI inflows. Today, our country is one of the world’s largest start-up ecosystems and one of the leading digital economies – testimony of where we are heading in the next decade.

India’s Growth Trends

There have been several megatrends driving India’s growth and, going forward, they will propel India’s economic growth. The government’s ongoing commitment towards introducing policies and announcing outlays lays a major thrust on fresh investment and encouraging businesses. The country has seen immense contributions from industries, including pharma, chemicals, industrial machinery, electronics, auto and textiles. India aims at capex-led growth, mergers and acquisitions and PE/VC-led investments to drive its growth in the coming years. Globally, there is a tremendous thrust on supply chain diversification. India is among the top four destinations for relocation of American companies.

Roadblocks and Action Plans

India’s growth story is plagued by several challenges, including unemployment, high logistics costs, poor infrastructure, underutilised capacity and skill gaps. However, the government has been quick to recognise these challenges and jump into action. Unified Logistics Interface Platform (ULIP) ensures ease of business through simplified and transparent document clearance and reduction in freight costs.

The country’s infrastructure is seeing a major overhaul to ensure better connectivity for people and goods. In recent years, tunnels, bridges, roads and railways have successfully connected the remotest locations in our country with the mainland. Multi-modal logistics parks have provided better access and state-of-the-art storage facilities.

Through the introduction of programmes such as the National Career Service, employers and employees can both have their needs addressed. Encouraging PPPs and new businesses have been two of the major factories driving India’s growth and will continue to remain growth drivers. The government is also laying special emphasis on skilling the nation’s youth to meet the demands of emerging industries such as clean energy.

While the focus on clean fuels through the Green Hydrogen Policy is a key step to self-reliance in energy and raw material demands, going forward, the government needs to set up a web of energy relationships with neighbouring countries such as Myanmar, Vietnam, Kazakhstan and the Gulf nations. Free trade agreements with UAE and Australia will help boost the import of key raw materials.

As for private companies, they need to take charge of tie-ups with major exporters of foreign countries to boost relations and securitisation of raw materials. Joint ventures between Indian and foreign players will go a long way in building such relations.

Supply Chain, A Great Enabler

A resilient, efficient and transformative supply chain will strengthen the platform for India’s $10 trillion dream. If we look at the sector over the past two decades, it has become one of the top propellers in economic growth worldwide. According to a McKinsey Global Institute report, India’s logistics sector will increase at a CAGR of more than 10% from $200 billion in 2020 to $320 billion or more by 2025.

Technology, the game changer across industries, has played a key role in redefining logistics and supply chain through warehouse management systems (WMS), automation, AI & ML and IoT for order placements, tracking to inventory management.

According to a Gartner report, leading supply chain organisations acknowledge technology as the key factor in giving them competitive advantages by helping improve decision-making and manage assets. By identifying tech as a critical investment area, the report states that by 2026, more than 75% of commercial supply chain management application vendors will deliver embedded advanced analytics (AA), artificial intelligence (AI) and data science.

Our logistics, at present, accounts for 13-14% of the GDP, and with seamless connectivity, superior infrastructure, and strong export and logistics efficiency, it can be brought down to 7-8% of the GDP. With National Logistics Policy, the Government of India envisages developing a technologically-enabled, integrated, cost-efficient, resilient logistics ecosystem. It will include boosting road, rail infrastructure and waterways, using digitisation and through skilling and upskilling.

SCM & the Chemical Industry

Manufacturing exports are expected to cross the $ 1 trillion mark by 2028, and the chemical industry looks to take a major charge in achieving the target. One of the few sectors to remain relatively unscathed by the pandemic, the Indian chemical industry contributes around 7% of the Gross Domestic Product (GDP). The sector will play a critical role, especially in the next five to 10 years, to be able to play a key role in India becoming a $10 trillion economy.

With the sector seeing a sea of transformation, primarily owing to the advent of digitisation, the chemical industry will need to embrace changes to become future-ready. Supply chain and logistics assume significance here as organisations will have to tailor their supply chain management (SCM) processes to align with their needs as well as those of their customers. Automation of supply chain processes is one of the best ways to adapt to changes in the markets. A key factor for the chemical industry is to contribute towards investing in robust cold chain machinery because there are products – chemicals and drugs - which are required to be transported in refrigerated conditions.

It’s a no-brainer that customers themselves are the starting point for companies to achieve customer excellence. Therefore, it is critical to take the support of data-driven insights to serve them better by providing customised services. Predictive analytics is another area that can help with advanced results. Customisation of products according to demand is a trend that is helping companies survive volatile times and improve the production capabilities of customer-specific products. This also helps in working out competitive pricing, which is beneficial for both, companies and customers.

An important part of digitisation is collating data such as personal health records and patient health records, an area that the government needs to prioritise in the coming years through which several industries can be streamlined.

Sustainability holds the Key

Traditionally, the chemical industry is a power guzzler. While India is making several efforts to transition from coal-based to more sustainable forms of fuels, there is still a long way to go. In the United Kingdom, Carbon Emissions Tax was introduced as a measure to impose a tax on businesses for each tonne of carbon dioxide emitted over the set allowance. Going forward, India can consider similar measures to ensure a reduction in emissions. Our government has already taken measures to what is being looked at as the hydrogen economy. Encouraging the production and eventually use of clean fuels such as green hydrogen and ammonia, there will be a positive impact on the environment. Sops need to be provided at the national level to create machinery for the widespread generation of clean fuels. Our policies should be aligned by giving priority to PLI schemes to those businesses investing in green initiatives.

A challenge faced by the chemical industry is putting a lid on emissions. However, research and innovation using technology can ensure the discovery of radical processes that will indeed help in curbing pollution. Another factor that will help in this regard is boosting infrastructure, which will cut down on transportation time and the eventual use of fuel needed for the same. While India always had tight regulations concerning effluent generation, our country now needs to set up global-scale effluent handling facilities. This will help avoid effluent-related issues while working with cost-effective alternatives.

To sum up, the Indian economy is indeed a ‘bright star’, which is growing well and will continue at it faster than the rest of the world. The efforts and investments put in by the government is aiding the process. The digital push will ensure technological interventions enable capabilities to improve the productivity and cost-effectiveness of products and services. The chemical industry will aid the growth of the economy and continued focus on sustainability, technology and supply chain will make this industry one of the key pillars of the Indian economy.