4 reasons why India’s tech industry is set to explode
Photo by Glenn Carstens-Peters on Unsplash
With 5G internet making blockchain technology and Artificial Intelligence (AI) becoming more widespread, 2022 is set to be a year of rapid digital innovation across the planet.
While Western countries have been at the forefront of tech advances in the past, the signs show that Asian countries like China and India will play a much bigger part in the next stage, commonly known as Web3 technology.
India’s tech industry is primed to make the most of this shift: here are four reasons why.
India is forecast to be one of the largest import markets in the world
At the turn of this year, India was already ranked as the eighth-highest importer in the word with 2.8% of the global share. This is set to rocket over the coming years, though.
By 2030, analysts predict India will be in the top four nations on the planet for imports. Huge consumer demand is behind it: rising income levels mean more people want the latest products, with tech goods making up a huge part of that.
High consumption fuels demand and funding for new ideas, too, as Indian companies seek ways to satisfy a hungry market. According to government data, this is already happening: India recorded 44 new billion-dollar tech companies in 2021, compared to just nine in 2019.
Far from being enough, though, industry experts are calling on the country to raise its game to meet the growing consumer demand in 2022.
It’s part of the ‘Eastward Economic Shift’
India and China are at the centre of global economic change known as the ‘Eastward Economic Shift’. Rapid advances in the Indo-Pacific region – accounting for over half of the global growth between 2019 and 2050 – mean Asia will become the most powerful continent within the next decade.
This change is also seen in the expansion of E7 (emerging economies) GDPs, of which China, India and Indonesia make up three of the seven nations. Forecasts predict E7 nations to have the same global import demand as G7 countries by 2050.
While this might seem a long way off, it will have a positive effect on the region’s current tech markets. Long-term investor confidence in tech companies in E7 nations point to a rosy future. And, as is common knowledge, businesses that are confident about the long term are more likely to take risks and produce innovative products.
It has a growing middle class that will boost disposable income
A rise in living standards in western societies like the USA and the UK saw many families move away from a working-class identity towards an expanding middle class – and the same is likely to happen in India.
People who economists term as ‘middle class’ tend to have much more disposable income, which they often spend online. While this might increase the likelihood of potentially harmful activities, like gambling in an online casino, it should also boost spending on the latest gadgets, such as smartphones and laptops. Many experts predict a big rise in tech revenue over the next decade.
Consumer confidence in tech products produces a cyclical effect. Companies compete to bring new tech products to the market, which members of the middle class are eager to snap us as status symbols or out of genuine enthusiasm. This has happened in western countries, particularly the USA, since the the 1950s, and is likely to take off in a similar way in India.
It’s close to closing a major trade deal with the UK
The UK economy has struggled since leaving the European Union, with official figures confirm that it is lagging behind other world leaders.
Leaving the EU has forced the UK to look for deals elsewhere around the world, including a major agreement with India. The deal is expected to benefit India greatly: The Resolution Foundation, an independent British thinktank, predicted that it would replicate the success of China in agreeing a similar deal with Germany.
The deal would give India a comparative advantage in the export of business services to high-end companies in London, which would stimulate the flow of new tech ideas back from one of the world’s largest tech hubs. The fact that India has so many English speakers is also a big benefit, as workers can easily move between the two economies.
The above factors contribute towards an extremely positive outlook for India’s tech industry that is set to receive major domestic demand and outside investment. If it can overcome short-term challenges like the impact of Covid-19, then the sky’s the limit for the subcontinent.
