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• India's consumer spending on goods is projected to grow by 7% over the next five years, with significant growth in export industries.
• The electronics industry is expanding rapidly, driving a 44% annual growth in telecom equipment exports from 2015 to 2024.
• India is expected to be the fastest-growing major economy over the next three years and the third largest globally by 2030.
• The government's focus on digital transformation and upskilling the workforce, along with India's entry into JP Morgan's Government Emerging Market Bond Index, are expected to contribute to this growth.

India's consumer spending on goods is projected to grow by 7% over the next five years, according to a recent report by S&P Global Market Intelligence. The report indicates that the value of consumer spending on goods in India was $1.29 trillion in 2024, and this figure is expected to increase significantly in the coming years.

The growth in consumer spending is particularly noticeable in export industries such as apparel, household equipment including appliances and electronics, and transport equipment. The report forecasts growth rates of 9.5%, 8.8%, and 8.5% respectively in these sectors over the next five years.

India's electronics industry has been expanding rapidly, following an assembly-to-component strategy. This approach uses tariffs and production-linked incentives to attract investment in the manufacturing of smartphones and other network-connected devices.

India's Manufacturing and Export Growth

The large scale of sales opportunities in the Indian market has provided justifications for investments in manufacturing within the country. In addition to manufacturing for local sales, contracted electronics manufacturers also export products, particularly smartphones. This has driven a 44% annual growth in telecom equipment exports from 2015 to 2024.

Emerging markets such as Malaysia, Indonesia, and India have successfully attracted investment and boosted exports by leveraging their unique value propositions. These markets have been able to compete with developed economies' government support for local manufacturing and the use of rules of origin to secure their economic interests.

India is expected to be the fastest-growing major economy over the next three years and the third largest globally by 2030. Its 2024 entry into JP Morgan's Government Emerging Market Bond Index could provide additional government funding and unlock significant resources in domestic capital markets.

India's Future Economic Trajectory

However, this is only a first step, and investors will continue to seek improved market access and settlement procedures. The Indian government has taken measures to improve its weak fiscal flexibility by boosting its capital expenditure, further supporting long-term growth. As the next decade approaches, the economic trajectory of emerging markets will likely be heavily influenced by their governments' design and execution of long-term growth strategies.

The government has also ramped up its focus on digital transformation, aiming to bridge the digital divide and expand internet access across rural areas, thereby unlocking new avenues for growth. The key to success is for governments to establish policies to upskill workforces both generationally (schooling) and in the short term (incentives for workplace education) and to reduce the 'brain-drain' effects of high-skill worker emigration.

India's ambitious target of up to 40 percent local value addition is comparable to China, which only achieved its current 40-50 percent value addition after decades of manufacturing and assembly. The Indian conglomerate Tata Group's recent deal with Taiwanese Wistron Corp is set to result in the country's inaugural manufacturing unit for producing Apple 's smartphones.