Population (2020): 1.38 billion
GDP (2020): US$2.26 trillion
World Bank “Ease of Doing Business” Rank (2020): 63
Bilateral Trade with Singapore (2019/20): S$28 billion
Trading Partner Rank (2019/20): Singapore was India’s 10th largest trading partner
India’s economy has been growing at a steady upward trend prior to covid-19 and was the sixth largest economy in the world, in terms of gross domestic product (GDP) in 2020. According to the International Monetary Fund (IMF), the economy is expected to rebound in 2021 with a projected GDP growth of 9.5% in FY21/22.
India’s concerted effort to attract private investment, push for major infrastructure development, and improve the ease of doing business is helping to fuel India’s growth. The government’s business-friendly reforms have paved the way, with a Goods and Services Tax regime for a unified market, easier access to credit and streamlined processes for new businesses.
Rising incomes, rapid urbanisation and an increasingly digitally-savvy population are changing consumer behaviours and spending patterns. This presents significant opportunities for consumer-centric businesses to meet the growing demand of the Indian market, with consumer spending in India expected to grow from US$1.5 trillion to nearly US$6 trillion by 20301.
More people in India are using smart mobile devices for e-commerce, which could transform the retail landscape in the country. Revenue from e-commerce is likely to exceed US$200 billion by 2027 and continue to grow2.
Consumers now also have increasingly global preferences, which has led to a greater demand for high quality shopping malls, consumer products and lifestyle services. In particular, the young and more sophisticated Indian consumers are seeking foreign brands and imported consumer goods.
1 World Economic Forum, 2019
2 India brand Equity Foundation (IBEF), E-Commerce report, 2021
The Make in India initiative, launched in 2014, is viewed as key to India’s economic growth. Coupled with domestic consumption and demand from global markets, the initiative has driven growth in the food processing, automotive, and electronics sectors by attracting businesses from around the world to set up manufacturing in India.
As part of the initiative, the government introduced the Production Linked Incentive (PLI) Scheme to provide financial incentives to companies to increase their domestic manufacturing capacity and attract new manufacturers into India.
Additionally, the recent Atmanirbhar Bharat (Self-Reliant India) campaign has increased investments in critical sectors such as electronic, technology products, and white goods, with a focus on supply chain resilience.
Foreign direct investments (FDI) into India have also increased since the launch of the initiative. India registered its highest ever annual FDI Inflow of US$81.72 billion in FY20/21 compared to US$45.15 billion in FY14/15. Singapore was India’s top foreign investor in FY20/21, accounting for 29% of the total FDI inflow into India, followed by the US at 23%3.
3 Department for Promotion of Industry and Internal Trade (DPIIT)
Launched in 2015, Digital India is a flagship programme of the government of India to transform India into a digitally empowered society and knowledge economy. This includes strengthening online infrastructure and improving internet connectivity in rural areas.
Implementation of various initiatives have ensured faceless, cashless, and paperless governance that has laid the foundations of a strong, robust, and secure Digital India.
Examples include biometric-based digital identity Aadhaar, national payment app Bharat Interface for Money (BHIM), and digitisation of citizens’ documents with DigiLocker.
This has provided a bedrock for companies to innovate and digitise rapidly, and tap on India’s large, connected market with up to 700 million smartphone users and 840 million internet users by 20234. With rapidly improving technology and falling data costs, technology-enabled business models could become pervasive over the next decade in India.
4 India brand Equity Foundation (IBEF), 2021