New Delhi: Indian companies could emerge as major players in shaping the global economy over the next decade, with 18 high-potential sectors poised to generate $1.7-2 trillion in revenue by 2030, up from $690 billion in 2023, according to a new report by McKinsey and Co.
Collectively, these sectors—which include electric vehicles and batteries, artificial intelligence (AI) software and services, and e-commerce—could contribute nearly 30% of India’s incremental GDP by 2040, the report said.
Among the other sectors it mentioned are semiconductors, medical devices and biopharma, aerospace and defence, and cloud computing.
Titled ‘India’s Future Arenas: Engines of Growth and Dynamism’, the McKinsey report also highlights emerging opportunities in cybersecurity, industrial electronics, renewables with storage, robotics, urban construction, auto component manufacturing, space, nuclear fission, travel and tourism, and the bio-to-X economy.
Bio-to-X systems, which convert biomass into other products, offer significantly lower carbon emissions than fossil fuel-based systems.
“Together, the arenas represent powerful focus areas for India’s next economic leap as they could capture approximately 30% of India’s incremental GDP by 2040,” said Rajat Dhawan, India managing partner, McKinsey and Co.
“Although precise trajectories are difficult to forecast, breakthroughs in these arenas could propel India toward its aspiration of global economic leadership,” added Dhawan, who co-authored the report.
National priorities, global leadership
India’s growth trajectory, however, hinges on aligning industrial capabilities with market focus, according to the report, which outlined four strategic pathways.
In sectors with nascent capabilities and a domestic focus, such as semiconductors, robotics, industrial electronics, and nuclear fission, India must build foundational strength to drive self-reliance, McKinsey said.
Where capabilities are stronger, such as in renewables with storage, e-commerce, cloud services, tourism, and urban construction, India should rapidly scale up to meet national priorities, it added.
In globally relevant sectors with emerging capabilities, electric vehicles, batteries, medical devices, biopharma, aerospace, and bio-based tech, India’s focus must be on sharpening competitiveness to serve both Indian and global markets, the report said.
In areas where India already has strong capabilities and global reach, like in auto components, space, AI, and cybersecurity, the goal should be to seize global leadership, McKinsey added.
“The 18 arenas were arrived at based on three core ingredients—potential for technological or business model step change, escalatory investment dynamics, and a large and growing addressable market,” said Bhavesh Mittal, partner, McKinsey and Co., and a co-author of the report.
“Each arena represents a certain strategic position for India, contingent upon the extent of India’s capabilities and the market focus on either India alone or on broader world markets, thereby requiring a differentiated playbook to win,” Mittal added.
