India is at a pivotal stage in its economic transformation, aspiring to solidify its position as a global economic powerhouse and become one of the world’s largest economy this decade.

Amid global economic and geopolitical uncertainties, India has emerged as a bright spot for investors, thanks to its strong macroeconomic fundamentals, strategic location, and balanced approach to economic growth and geopolitics in a fragmented world. Sectoral reforms present new investment opportunities, particularly in tech manufacturing and services. Moreover, India’s youthful workforce presents a historic opportunity to propel the economy into a higher growth trajectory.

However, India’s growth faces challenges, including a skills gap requiring education reforms, lingering systemic issues affecting business confidence, and underinvestment in strategic sectors. These challenges have limited private investment and hindered India’s shift to a knowledge-based economy. As the world’s most populous nation and a major carbon emitter, India must address these obstacles while capitalizing on new opportunities and navigating global complexities to solidify its role as a key economic engine.

India’s growth hinges on addressing structural challenges while leveraging its strengths in STEM talent, technology services, and entrepreneurship. By advancing manufacturing, fostering innovation, and investing in digital and energy infrastructure, India can enhance global competitiveness and build a sustainable, inclusive knowledge economy.

This Asia Business Council report delves into India’s growth conundrum and resulting growth risks in key economic sectors, and forges a path forward to foster a more innovative, prosperous, and resilient nation.