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| Edited By: Pranjal Sharma |Source: DNA webdesk |Updated: Dec 31, 2017, 10:04 AM IST
This is perhaps the most exciting industry to watch out for. The impact of GST will be felt in 2018 with all its pains and promises. However, the industry will see consolidation, expansion and higher foreign investment. Large scale warehouses will be set up across the country. Increase in e-commerce will enhance supply chains from factories to consumer homes. An ICRA report says that the industry will continue to grow at a healthy 10 per cent over the next few years. The government expects doubling of revenues to $360 billion by 2032.
The disruption caused by new technologies of the fourth industrial revolution has triggered demand for new skills and learnings. Traditional and new institutions will change their curriculum to include the relevance of AI, data science and such streams. An increasing number of professionals will seek out online learning courses for rapid skill enhancement. A study done by KPMG and Google earlier this year indicates that India’s online education market will be $1.96 billion by 2021 from $247 million in 2016, with the biggest focus on reskilling of professionals.
Partnerships between global and domestic companies to manufacture in India will begin to bear fruit. The nascent industry will continue to see hectic activity, foreign investment and creation of a new industry ecosystem. Leading groups like Tatas, Mahindra and L&T have lined billions of dollars for investment in defence equipment. Domestic companies get only five per cent of direct orders from the defence services amounting to `5000 crore annually. This is expected to grow four fold in next few years.
This industry will be impacted by two large trends. First is the focus on electric vehicles. The Narendra Modi government is determined to kill internal combustion engine-based mobility in India. As the government begins to roll out its action plan, many global companies have begun to invest in electric batteries. The second big trend is slowing down of personal ownership of passenger vehicles. As ridesharing services gain momentum, automobile makers will have to focus on sales to institutions not individuals. These two trends will turn the industry upside down. While cars will sell, they will increasingly have to be cleaner, greener and safer. A FICCI report says that shift to EVs (Electric Vehicles) will help India save $30 billion worth of fuel by 2030. The industry will have to realign rapidly to survive.
The infotech industry has achieved much in last 25 years, but will decline over the next few months as it is has not been able to adopt, and adapt to, the fourth industrial revolution. Its clients are moving beyond software as a service model to blockchain- , AI- and IoT-based solutions. Young start-ups that offer smart new solutions will do better than traditional IT leaders of India. Industry body NASSCOM has the figures to confirm this decline of the Indian IT sector. It had projected export growth of 10 -12 per cent in 2016 -17, but exports grew only 8.3 per cent that’s $117 billion. For 2017 - 18, NASSCOM has projected a flat growth of 7 - 8 per cent in exports and 10 - 11 per cent in domestic business. Compare this with an exports growth of about 17 per cent and domestic market growth of 20 per cent in 2010 - 11, and one gets the complete picture.
Pranjal Sharma is an economic analyst, advisor and columnist who focuses on technology, globalisation and media. Author of Kranti Nation: India and The Fourth Industrial Revolution, he has edited and written books and papers on entrepreneurship, business transformation and economic policy. He has held leadership positions in print and television media for over 25 years, served on the Global Agenda Council of the World Economic Forum for eight years and is also a member of its Expert Network. He also guides projects on business intelligence and economic trend forecasting for Indian as well as global organizations.
