5 Mega Trends in India

What you would be after 5 years largely depends on the ‘books’ you read, the ‘people’ you spend time with, the ‘habits’ you adopt, the ‘food’ you eat, and the ‘conversations’ you engage. In a nutshell, what you are and what you would be depends on your right decisions.

The right decisions not only make a difference in the life of an individual, but the same is applicable for society and country. Society and country can be prosperous only if the right set of decisions or priorities are set. Like any other country, India has also its own set of problems like Poverty, Corruption, Unemployment, Education system, pollution, and uneven growth. The solution lies in action in the right direction.

Let me share five mega-trends which gives hope that as a country, India is in the right direction.

1. Policy focused on large Industries:

India’s manufacturing sector contributes close to 17% of GDP. To address huge problem of unemployment and underemployment, there is no better option than focus on growth of manufacturing sector. To push manufacturing output, Government of India has announced Production Linked Incentive Scheme worth $27 Billion for 14 Industries.

Why is this significant? They say “You can’t get different results by doing the same action every time”. Since independence, Government policies where pro Small and Medium Enterprise (SME) and rightly so. In the closed economy, this kind of policy tilt works well, but once you are part of global trade, advanced technology plays a very important role in competing. Let’s say a company based in United States wants to buy some goods; thus that company has option of choosing best supplier from more than 200-odd countries from where company would get cheapest and best quality product. So Indian supplier would need to beat 200 competing countries to be able to win the contract. Herculean task. SMEs ability to adopt latest technology is limited because of their size/limited revenue. Many countries have helped home-grown companies to become big so that those companies do R&D and bring latest technology in manufacturing. This latest/high-end technology is supposed to percolate down to smaller industries and in Toto, it’s beneficial to overall country. Classic examples of this approach are South Korean companies like Samsung, LG and Hyundai.

Because of many compulsions, Indian Government never supported large scale Industries but looking at need of the hour, now finally Government has decided to take path of large Industry led growth model which is significant change from earlier policy. Production linked Incentive (PLI) scheme is applicable to 14 sectors where companies need to investment minimum threshold to be eligible for scheme and there is opportunity of 4%-6% incentive on incremental sales. The best part is that the PLI scheme seems to be a huge success looking at the participation levels of all mega companies.

2. Export Focus:

Almost all prosperous countries are very strong on exports. Though 16% of humanity lives in India but in just a couple of decades back, Indian share in global exports used to be less than 0.5%. In last financial year, Export grown by whopping 40% leading to achievement of $418 billion worth of merchandise export. Thanks to robust exports, the export share rose to 1.9%. Last year’s export performance is significant because between 2012 to 2020 the export growth was stagnant. Export constitutes approx. one fifth of Indian economy; thus exponential export growth obviously helps overall economy. India has managed to export $1.5 billion dollars in arms exports, which is 6 times more than what it used to be 7 years back. Recently, India signed a $375 million deal to export the BrahMos supersonic cruise missile to the Philippines which proves India’s growing capability in cutting edge technology. Electronic manufacturing capability is another highlight which is proved by Mobile phone exports from India which increased to $5.5 Billion in FY2022, registering 75% growth. More than the figures, what is important is that people are talking about exports, which is compelling media to give space to export-related news.

3. Entrepreneurship:

India has emerged as the 3rd largest country in the space of start-ups. In the first week of May 2022, India registered its 100th unicorn. The kind of enthusiasm young India’s are showing towards entrepreneurship is incredible. MNCs are surprised to note that despite them offering top dollar to final year students studying in India’s premier educational Institute, students are not willing to join them but opting for starting something of their own. This is a big shift in a country where news of lakhs of people applying for few hundred clerical jobs opting in Government sector used to be flooded.

To promote entrepreneurship, Government of India established Micro Units Development & Refinance Agency Ltd (MUDRA) where people can take loan up to INR 1 Million ( $13,000). In last 7 years more than 340 Million Indian’s took this loan and best part is that 68% of them are women.

The kind of euphoria “Shank Tank” has created in India is unbelievable.

4. Connectivity:

The world has been greatly benefited by the movement of goods, people, and ideas; thus better connectivity is most important for prosperity. India is constructing almost 10,000 km of highways every year. Air traffic has almost doubled in the last 5 years. Thanks to one of the cheapest internet cost in India (approx. $0.1 per GB), the per-user internet consumption has touched 16 GB in a month, which is double that of developed countries. Well-traveled and well-informed Indians would demand more growth-oriented policies from the government, which is crucial for prosperity.

5. Digital Adoption:

As per Government sources, India’s digital economy was of the size of 200 billion in 2017 and expected to cross $800 by 2025 at current prices resulting in share of the digital economy jumping from 8 per cent in 2017 to 18% percent in 2025. Remarkable achievement by a country where the adult literacy rate is still below 80%. India leads digital payment in the world. In 2021, India made 48.6 billion real-time payments beating China, which is in second place, with 18.5 billion real-time transactions.

More than 1 billion Indians got digital Covid vaccination certificates, while citizens of most developed countries got hand-written Covid vaccination certificates.

Indian’s digital adoption would immensely help start-ups like Practo, which connects doctor and patient on it’s platform. Did you know grocery delivery apps are still unheard of in many developed countries?

Charles Dickens once said that “the most important thing to be successful is to stop saying ‘I Wish’ and start saying ‘I Will’.

India has started saying ‘I Will’. Now it’s up to you to live in the ‘Wish’ or ‘Will’ world.

If you are convinced with Mega trends, please share this article with your family and friends. Awareness is key to progressive society and country.

Jai Hind!
Manoj Tripathi
(Author of bestselling book “Power of Ignored Skills”)

Disclaimer: The views mentioned in the article are personal. The purpose is not to hurt the sentiments of any cast, creed or group of people. Data is an approximation to help readers understand the context.

Electric Vehicle Era has Begun, Why it Matters to Us?

The wheel was invented almost 5500 years back and it has been considered as one of the most important inventions of all time. Wheels helped humans not only to move much faster but carry heavy loads for transport. This led to more human interaction, exchange of ideas, and finally more trade. All these things brought prosperity.

Talking about prosperity, today developed countries have 600-800 cars per 1000 population while developing countries like India have 22 per 1000 population.

When we talk about Car, usually Internal Combustion Engine (ICE) Vehicles comes to our mind (Petrol & Diesel) and we think Electric Vehicles (EVs) are recent phenomenon but do you know, EVs were introduced before ICE?

The journey of Internal Combustion Engine Vehicles (ICE) can be attributed to Carl Benz’s invention of Motor Wagon in 1885, while initial Electric Vehicles were introduced almost 5 decade before ICE. In 1828, the Hungarian Ányos Jedlik invented an early type of electric motor, and created a small model car powered by his new motor and subsequently Scottish Inventor Robert Anderson also invented a crude electric carriage. Those were non-chargeable primary cells, but finally in 1881, French engineer Gustave Trouve made the world’s first full scale electric Car.

In fact, in the early 1900s, Electric Vehicles were selling double that of ICE. Then the question arises, how EVs got into oblivion within 2 decades.

Probable reasons why EVs lost against ICE:

• Low range: In the early 1900s, Electric Cars had low range (50-65 km). Rapid road construction urged people for long travel, which was not possible with Electric Cars

• Lack of Charging Stations: Absence of Electricity outside the city made Electric Car owners to carry spare Electric batteries which made vehicles heavier. (Lack of charging infrastructure was a challenge also at that point in time)

• Starter Motors Introduction: ICE Cars required hand cranking which was very difficult, but with Starter motor introduction in 1912, the problem was solved

• Fossil fuel supply: Due to widespread Petrol discovery and availability, prices of Petrol dropped hence ICE further gained momentum after 1912

Mass Production: Due to mass production of ICE Between 1913-1918, the price became less than half of Electric Cars. (Ford Model T impact)

Let’s move fast forward to current times. In 2020, Electric Cars contributed 4.6% of worldwide Cars Sales while the same figure for India is just 0.25%. China sold approximately 300 times more Electric Cars than India. (12 lakh EVs sold by China against 4000 by India in 2020).

Indian government has set a target of 30% Electric Car Sales penetration in 2030.

Why Government of India is insisting for EV adoption? The main reasons are:

• Air Pollution: As per various reports, among top the 30 most polluting cities in the world, 22 are from India. Unfortunately, Delhi is being tagged as the most polluted capital in the world. Though there are many factors behind the pollution but automobile is most talked about

• Oil Import Bill: India imports approximately $100 Billion worth of Crude Oil which is expected to double in coming 6-7 years. That’s Rs 7500000000000. Imagine this much money goes out of the country every year and what comes is a liquid which turns into smoke after some kilometer of vehicle running

• EV Manufacturing: The world is moving towards EV. India has successfully made herself small Car production hub, now incase India is left behind in EV race, there can be potential manufacturing loss

Challenges behind EV adoption:

• Higher Cost: Currently EVs are around 50%-60% costlier than ICE

• Lack of Charging Infrastructure: Lack of public charging is worrying potential buyers

• Refueling/Recharging time: It takes ICE engine to get full tank fuel within 5 minutes, but fastest charging solutions in India might take hours to fully charge the battery

• Battery Safety: People are worried about safety concerns with batteries (especially in flood like situation, etc)

• Resale Value Concerns: EV resales value is still not known

• Home Charging Concerns: Many customers don’t have dedicated parking lot, hence home charging might be difficult

Despite so many challenges, why EV Sales would exponentially increase in the future:

• Batteries are getting cheaper: Battery prices have dropped more than 90% in last one decade, thus there is trend of EV price reduction

• Government Subsidy: Governments would increase taxes on ICE while giving subsidies on EVs, if price gap between EV and ICE would reduce to 20% vs current 50%-60%, EV adoption would exponentially increase

• Adverse fossil fuel price: Diesel and Petrol fuel prices might further increase in future prompting customers to shift towards EV. In Europe, now Road tax is as per CO2 emission

• Better Driving Range: Thanks to advance research, battery density is increasing and range is increasing beyond 400 km

• Advantage over ICE: EVs have better acceleration and lower maintenance costs

• Increasing Charging Infrastructure: Charging Infrastructure will increase in coming years. More visibility of Chargers would give confidence to prospective buyers.

• Sundown of ICE: Many car manufacturers have announced fully switching to EV in coming years

• Higher EV visibility: More EVs on the road would give confidence to fence sitters

What are some EV related doubts in India?

• “We don’t have enough Electricity Production in India to cater demand of EVs”

It’s not correct. For the last 5 years, India has been a power surplus country. In fact, even in 2030, when every 3rd car sold in India would be Electric, the demand of Electricity because of EVs would increase by only 5-10% which is manageable.

• “Today we are importing fuel from Middle East and America, once we shift to EV, our dependency for battery components would be on countries like China”

Yes its right but recycling of fossil fuel is not possible but luckily recycling of battery component is possible therefore if we can work on battery recycling, dependency on annual import would reduce.

• “We don’t have enough Electric Charging Stations”

‘Necessity is the mother of invention’. In coming few years, you will see that even roadside Pan Shops and Dhabas (food joints) would offer charging facility. (The success of UPI/Digital money transfer is classical example of transformation).

• “India produces more than 70% electricity by burning fossil fuels. So EVs would consume electricity produced by polluting fossil fuels then how it’s helping cause to curb pollution”

Yes it’s right. Only things is that pollution in Major Cities might go down at the cost of some remote areas where the fossil fuel based electricity is being produced but silver lining is that Government of India has pledged to produce 500 Gigawatt Electricity through Renewable sources by 2030 which is currently just 100 Gigawatt.

We will see more actions on Electric Vehicles in the coming days. Welcome to exciting times!

Thanks a lot for reading!

If you liked the article, please share with your near and dear.

Manoj Tripathi

Author of the book titled “Power of Ignored Skills”

(Disclaimer: The article is the personal view of the author. Data is an approximation to make readers understand the logic)