The Challenges and Opportunities for India's Economic Goal of 5 Trillion USD by 2025

India, under the leadership of Prime Minister Modi, has set ambitious goals for its economic growth, aiming for a 5 trillion USD economy by 2025 as forecasted by the International Monetary Fund (IMF). This goal promotes economic stability and diversification, but the path to achieving it is fraught with challenges and opportunities.

Trends in Global Telecommunications and Media Consumption

Driving the global economy is the expanding telecommunications sector, which is forecast to reach $1.5 trillion in 2021. This represents a 1% increase over 2020. Asia-Pacific remains the fastest-growing region, with key market shifts emphasizing data-centric services over traditional voice services. As reported by IDC, the fixed data and mobile data segments are projected to see growth, primarily due to the resurgence in roaming revenues and the migration of audiences to over-the-top (OTT) video services.

The transition from traditional pay-TV services to OTT platforms is a significant trend. While the value of mobile, and to a lesser extent, fixed voice services are declining, the revenue generation from fixed data and mobile data services is expected to rise. The recovery of the global tourism industry is expected to bolster roaming revenues, further driving the growth of the mobile segment.

Telecommunications growth is expected to remain stable during the upcoming forecast period, with 5G playing a pivotal role. By 2025, 5G is expected to account for 38.8% of total mobile connections and 41.3% of total mobile spending, highlighting the growing importance of 5G technology.

The global economic landscape remains uncertain, with the lingering impacts of the COVID-19 pandemic and global supply chain disruptions posing risks. However, telecommunications companies have shown resilience, and the market is expected to remain optimistic for the next few years.

The Path to 5 Trillion USD

India has ambitious plans to become a 5 trillion USD economy by 2025. According to IMF forecasts, India will reach 4.73 trillion USD in 2024. To achieve 5 trillion USD, the nation would need a GDP growth rate of 14% annually. However, the 2020 corona outbreak introduced significant economic challenges. The outlook for GDP growth post-COVID appears to be in the negative, necessitating a strong turnaround to achieve the growth needed.

Historically, there was a very low likelihood of reaching the 5 trillion USD goal before the corona outbreak. The current global economic environment and the need for double-digit GDP growth make this goal extremely challenging, if not impossible. Postponing the target by one year might be a realistic approach, but achieving sustained double-digit growth for the next five years seems increasingly difficult.

Conclusion

The path to achieving India's ambitious goal of a 5 trillion USD economy by 2025 is fraught with challenges. The resilience and adaptability of the telecommunications sector, despite global economic pressures, provide some hope. However, the current economic environment makes achieving the goal via double-digit growth nearly impossible. The future will require innovative policies, strong economic reforms, and sustained efforts from both the public and private sectors to drive the necessary growth.