Inclusive growth reshapes India

“Investment will be a key growth driver over the coming year, underpinned by the government’s ongoing capex drive and an acceleration in private investment,” says Zook.

While consumption is likely to moderate slightly over the coming year, he points out that it will remain resilient, noting that India’s government has significantly increased infrastructure spending, a key driver of investment growth.

“Public capex is expected to reach about 3.4 per cent of GDP in FY25, up from 1.6 per cent of GDP in FY20. It’s likely that public capex is at its peak in the current fiscal year and will moderate gradually as the government balances its capex push with fiscal consolidation,” Zook explains.

On the private investment side, Fitch says real estate investments have surged in recent years, with a healthy outlook. However, manufacturing investment, which is critical to a robust medium-term outlook, has yet to experience durable acceleration, though there are signs of growth.

“Our baseline is that private investment will pick up in 2025 and beyond, as improved bank and corporate balance sheets since 2020 should support a positive investment cycle. This will drive medium-term GDP growth of around 6.2 per cent,” Zook says.

“Smart manufacturing initiatives, including real-time production monitoring and predictive maintenance, boost productivity and optimise costs,” Marwah adds.

Lumax, a leading manufacturer of automotive components, is also focusing on the development of lightweight, energy-efficient solutions, solidifying its role as a key player in India’s transforming automotive sector.

Zook notes that expanding the manufacturing sector will play a key role in sustaining strong medium-term growth, improving India’s global competitiveness, and providing ample employment opportunities for the growing job-seeking population.

Candytoy Corporate (CTC), one of the largest candy toy producers globally, reflects this approach, operating six manufacturing units in Indore, Delhi, and Hyderabad, along with 11 contract manufacturers.

“Our investment strategies align with Make in India. We supply to 40 countries and are chosen for our quality and price competitiveness,” says Gaurav Mirchandani, Director.

Meanwhile, experts highlight that India’s growth is also driven by clean energy and decarbonisation.

According to Anirudh Bhuwalka, CEO of Blue Energy Motors, who highlights the role of companies like his in advancing LNG-powered vehicles.

“Government policies and incentives aimed at reducing carbon emissions, coupled with rising awareness among businesses to adopt greener supply chain practices, are further catalysing the transition,” he says.

“These advancements not only align with India’s commitment to global climate goals but also position the country as a leader in sustainable growth,” Bhuwalka adds.

Bhuwalka further emphasises that Blue Energy Motors’ investment strategies align with India’s broader vision, particularly Make in India. The company focuses on localising advanced technologies for LNG-powered trucks, which supports both industrial growth and sustainability goals.

“We are creating an ecosystem that involves collaborations with suppliers, fostering creativity, and creating jobs. Our investments in cleaner, more efficient transportation solutions align with the government’s sustainability and security priorities,” Bhuwalka says.

Regulatory reforms

India has significantly improved its business environment through simplified laws and reforms, eliminating over 1,500 outdated regulations to streamline the regulatory process.

Marwah credits regulatory reforms, such as the Goods and Services Tax (GST) and digital tax filing systems, for creating a more business-friendly environment.

“This has reduced delays, minimised costs, and improved cash flow management. Similarly, the consolidation of labour laws has enabled greater flexibility in workforce management,” he says.

Bhuwalka highlights that his company has capitalised on regulatory reforms that have simplified business operations, particularly in areas like vehicle registration and incentives for clean technologies.

“These changes have allowed Blue Energy Motors to focus more on innovation and expanding its footprint rather than navigating bureaucratic hurdles,” he says., adding, “The improved regulatory landscape inspires confidence, and we’re committed to leading the shift towards sustainable logistics in India.”

Mirchandani of CTC notes that since January 2021, the government of India has banned the import, manufacturing, storage, and sale of non-BIS (Bureau of Indian Standards) compliant toys through the issuance of the Quality Control Order (QCO).

“It provides all-round support to the domestic toy industry by promoting Made in India. This has helped us immensely,” he adds.

Zook notes that India’s regulatory improvements could attract more FDI, particularly from companies diversifying their supply chains amid the China+1 strategy. However, he warns that global economic uncertainty could temper FDI growth in 2025.

Inclusive growth

India’s inclusive growth strategy has redefined its socio-economic landscape. Policies like Mudra Yojana, which offers credit to micro-enterprises, have furthered these goals, while platforms like BHIM-UPI have democratised financial services, boosting entrepreneurship and consumer confidence.

Lumax is committed to fostering inclusive growth by promoting equitable opportunities within its workforce and contributing to India’s economic development. “We are actively promoting workplace diversity by ensuring fair representation across genders, geographies, and socio-economic backgrounds,” says Marwah.

Companies like CTC also champion inclusivity, with over 80 per cent of its 2,000 workers being women. “We plan to open more manufacturing units within Indore and across India, keeping in line with the government’s Make in India initiatives,” Mirchandani says.

These efforts mirror broader government initiatives that focus on education, financial inclusion, and job creation for marginalised communities.

India’s outlook for 2025 reflects a comprehensive strategy integrating investments, sustainable manufacturing, inclusive growth, and regulatory reforms. With a vision for a Viksit Bharat, a developed economy, by 2047, India is steadily advancing towards its goal of equitable prosperity and global leadership.