Market Insights: India

Overview of India’s Economy

India, a vast and diverse subcontinent, stands at the crossroads of economic transformation. With a rich history dating back millennia, it boasts a complex tapestry of cultures, languages, and traditions. In recent decades, this remarkable nation has captured the world’s attention not only for its size but also for the rapid evolution of its economy. India’s economic landscape is an intriguing blend of tradition and modernity, where agriculture still thrives alongside cutting-edge technology, and where the challenges of poverty and inequality coexist with the opportunities of a burgeoning middle class.

GDP Growth

Since 2000, the GDP of India has increased by more than 7 folds. Her growth has drawn global attention with its remarkable trajectory. With consistently robust expansion, India’s GDP reflects a nation in transition, driven by diverse sectors and a burgeoning consumer base. India’s primary sector makes up more than one-fifth of its GDP, a number that has remained rather consistent in recent years.  GDP generated by the services sector has witness a slight increase over the 10 years, averaging to about 47%, with telecommunications, IT and software leading the way.1

Year GDP Per Capita Growth
2022 $3.386T 2,379.21 7.49%
2021 $3.150T 2,234.34 17.92%
2020 $2.671T 1,913.22 -5.78%
2019 $2.835T 2,050.16 4.91%
2018 $2.702T 1,974.38 1.94%
2017 $2.651T 1,980.67 15.58%
2016 $2.294T 1,732.05 9.06%
2015 $2.103T 1,605.61 3.16%
2014 $2.039T 1,573.88 9.82%
2013 $1.856T 1,449.61 1.59%
2012 $1.827T 1,443.88 0.25%
2011 $1.823T 1,458.11 6.71%
2010 $1.708T 1,384.17 25.13%
2009 $1.365T 1,121.25 11.54%
2008 $1.224T 1,019.51 -1.18%
2007 $1.238T 1,046.90 30.51%
2006 $949B 814.35 13.77%
2005 $834B 726.92 15.61%
2004 $721B 638.79 16.69%
2003 $618B 556.33 18.06%
2002 $523B 479.06 6.04%
2001 $493B 459.47 3.63%
2000 $476B 451.11 2.10%

Foreign Direct Investments

Net new foreign direct investment has risen greatly in the past 2 decades. FDI inflows reached USD 71 billion in the 2022-23 fiscal year, a drastic difference compared to inflows of a mere USD 4 billion in the 2003-04 fiscal year3. One of the key contributors to this increase has been a strong level of technology related investments, with the US firms strong commitment to invest in this area. Apart from the US, Singapore, Mauritius and United Arab Emirates are also some of the top sources of FDI inflows in recent years and highlights the rising importance of bilateral economic relationships with such established financial hubs.

Growing Markets & Markets with High Growth Potential

As with most developing countries, India has been regarded as a place of opportunity, with many countries and companies conducting in-depth research in the hopes of breaking into their markets and securing market share.

Spurred by the FDI inflows into India, the quantity of Indian unicorns has seen rapid growth over the past 5 years.  As of mid-2023, there is an estimated 108 Indian unicorns, with majority of them only reaching this status in the past 2 years. 21 of these achieved it in 2022, while 44 did so in 2021. These numbers reveal the impact that FDI has had on the startup industry in India. With the support of advanced economies who are investing in India, it is likely that this industry has a high growth potential and reflects a favorable long-term growth outlook for the Indian economy in general. It also supports India’s transition away from its agricultural sector and could serve to attract more FDI in the future.

The digital transformation of India is also expected to boost her growth of e-commerce, shifting the retail consumer market landscape in the long term. Many global MNCs with industrial knowledge in technology and e-commerce itself have already been inserting themselves into the market. By the end of this decade, it is expected that over 1 billion Indians will have internet access, doubling its numbers from the 500 million internet users as of 2020.   Together with India’s large and fast-growing middle class, and its strong domestic consumer market, the growth of the e-commerce market is expected to accelerate in the coming years.

India’s Demographics

With a whopping population size of more than 1.4 billion4, India now sits at the top of population rankings, overtaking China on April 20235, beating earlier projections of it happening in 2027. This is despite the slowdown in population growth, with rising life expectancy a major contributor instead. The number of people in the country is still expected to continue to rise for decades.

The population is rather young as well, with the median age below 30 years old, and the country will continue to have a largely youthful population for the next two decades, supporting its domestic demand levels and providing a workforce for its manufacturing sector. Urbanization however, remains relatively low, at 36.3%.

A deeper dive into the population numbers reveal that states in India’s south, which are more prosperous and have higher rates of literacy compared to the north, have already to stabilize its population rates and have, in fact, begun to fall. The north on the other hand, which consists of some of the poorest and agricultural states contribute largely to the booming population numbers.

In terms of income, India’s median salary is 27,200 INR per month (330USD)6. More significantly, the average monthly salary of male employees is 4 times more than that of the females. Income disparity remains a large issue in India, as it continues its transition into a more developed economy. As of 2021, the top 1% in India owned more than 40% of the total wealth in India while the bottom half of the population had around 3% of total wealth.

Indian Consumers and Consumer Trends

India is undergoing a distinguishable evolution in its consumer landscape. With a digital revolution taking place, together with the greater awareness of several key factors including healthcare, wellbeing and sustainability, this section aims to highlight the key observations about Indian consumers and their behavior.

Riding Digital Advancements

Riding on their success of its “Digital India” program that was launched in 2015, India has been rapidly digitalizing, with growing broadband reach, affordable data usage costs, and its constant development of digital infrastructure. India’s digital services has also grown tremendously as it supports the 700 million plus users, including the 350 million digital payment users and 220 million online shoppers7.

A report put out by Google, Temasek and Bain & Company8 also supports this continued shift in consumer behavior, stating that it has positioned India into its ‘Digital Decade’ and has forecasted India’s internet economy to grow from approximately $175 billion of consumption in 2022 to $1 trillion by 2030.  In terms of its contribution to GDP, it is expected to increase from 4-5% to nearly 12-13%.  The structural shifts in consumer trends, namely, digital seeking behaviors among internet users, has opened an array of opportunities for startups, large businesses to power India’s internet economy. Businesses able to adopt new business models to cater to the consumer of the future are well poised to capitalize on such growing opportunities.

Naturally, the B2C e-commerce and SaaS aspects will be the bigger drivers of India’s momentum. The industry should aim to produce inclusive content to help capture both mind and market share, while personalization and diversification will help differentiate and identify new revenue streams. Another important point of consideration among these would be providing sustainable options to meet the improving views towards a greener environment.


With a growing concern for the environment, buying behavior has shifted, consumers are demanding products and brands that are eco-friendly. Survey results show that 69% of consumers were willing to pay more for products which are sustainably produced or environmentally friendly.9 While this trend is true across the globe, being able to establish a dominant position in developing regions of India allows businesses to capture a greater market share and attain a competitive edge.

Many Indian brands and designers have begun to adopt sustainable practices. Specifically, the sustainable fashion market in India is expected to grow at a CAGR of 10% till 2026. A report by Boston Consulting Group estimates the sustainable fashion market to reach $9 billion by 202510. Given India’s rich textile heritage, singling out the fashion market here is intentional, with the strong potentially synergistic relationship of textiles and sustainability. There is an opportunity to take the country’s traditional practices and handicrafts and leverage on innovative techniques and sustainable materials to create eco-friendly textiles and fashion products.

Health and Wellness

Globally, the COVID-19 pandemic has significantly heightened people’s priority on health and wellbeing and India is no different. Coupled with the rising income levels, many consumers have placed a larger emphasis on their own well-being, raising demand for (but not limited to) fitness products, supplements, organic products, and mental health services. In fact, the market is expected to exhibit a growth rate of 5.55% (CAGR) during 2023 to 2028.

Fitness Products

As more and more consumers choose to live a healthy lifestyle, coupled with the urbanization of India, demand for fitness centres, gyms and the relevant equipment are expected to rise. Personal equipment also has seen an increase in demand. With the increasing popularity of digital workout solutions and integration of AI, consumers are beginning to place the onus on themselves to maintain their desired level of fitness. The home fitness equipment market was valued at close to US$4 billion and is expected to grow at a CAGR of 5.2% until 202811.

Dietary Supplements

Sharing a complementary behavior with the prevalence of fitness and sporting activities, the dietary supplement industry has also been thriving. Supplements can come in a variety of forms, be it post-workout supplements and pre-workout nutraceuticals. Due to interest in one’s nutritional diet to improve one’s athletic ability, the dietary supplement markets has much untapped potential. With the continued growth of consumer interest in sports performance and general well-being, gaps in the market remain unfilled, and consumer needs unmet.

Mental Health Services

There is a huge sense of openness and acceptance towards mental health issues in India. Many Indians are more willing to access mental health support for themselves or facilitate the same service for others who may need it. This comes fittingly with the rising demand for said services that has been exacerbated by COVID-19, rising awareness and additional pressure created by social media on body image issues, bullying and societal comparison. Furthermore, based on WHO standards, India faces a large shortage of supply of clinical psychologists and psychiatric social workers to service their population in terms of the ratio of such professionals to the population. The large deficit between demand and supply and signaled an opportunity for not only market growth, but also to improve social standards and wellbeing. In fact, the India mental health market is expected to grow by a whopping 15% (CAGR) from 2022-202812.

When considering the aforementioned digital advancements of India, the opportunity of providing mental health services online is large. This can come in a various forms, such as AI led apps, online therapy and peer social support groups.

Key Takeaways

  1. India boasts impressive economic growth
  2. FDI levels remain strong, with attraction in the technology sector.
  3. Demographic reveals a young and strong workforce that should be maximized in the rising industries
  4. Sectors such as e-commerce and information technology, healthcare and wellness and sustainability show potential in market growth
  5. Consumers preferences need to be catered to attentively, with many now focused on ethical consumption in the form of environmental care and social wellness.

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