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India Forward: Shifting Horizons · Look Forward

0:06
Hello, my name's Andy Critchlow.
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I'm head of news at S&P Global Commodity Insights, and welcome to the
0:12
Look Forward Podcast from S&P Global.
0:15
In today's rapidly shifting Markets success depends on
0:18
anticipating what's next.
0:20
The professionals who excel are those who can spot emerging trends
0:24
before they fully materialize.
0:27
Look Forward podcast delivers exactly that insights to help you prepare for
0:32
tomorrow's opportunities and challenges.
0:35
We bring you expert perspectives on macroeconomic trends, capital markets,
0:40
energy transition, and global trade.
0:43
With a sharp focus on what these developments mean for the decisions
0:48
that will shape your tomorrow.
0:50
This podcast connects you with S&P Global's Look Forward council bringing
0:55
cutting edge research on long-term trends and transformative market shifts.
1:01
Together we are committed to providing the forward-looking intelligence you need
1:06
to navigate uncertainty with confidence.
1:10
Welcome to the Look Forward Podcast, where we explore the forces
1:13
shaping tomorrow's global economy.
1:16
I'm your host, Andy Critchlow, head of News at S&P Global Commodity
1:20
Insights, and today we turn our lens to one of the world's most
1:24
dynamic and resilient markets, India.
1:28
As the global geopolitical and macroeconomic horizon shifts in
1:32
unprecedented ways, India stands as a critical inflection point with
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a diversified economy, adaptive policymaking, the BOL sectoral strategies.
1:43
India is not just weathering global volatility.
1:46
It's positioning itself as a decisive player In the next
1:50
chapter of global growth.
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From private credit expansion and trade reconfiguration to digital
1:57
infrastructure and nuclear energy reform.
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India's multidimensional approach reflects a whole systems mindset.
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It's a story of resilience, ambition, and transformation.
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In this episode, we will focus on unpacking the soon to be
2:13
published India Forward report.
2:15
The S&P Global Look Forward Council will unpack India's
2:19
outlook for 2025 and 26 and beyond.
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Explore the sectors driving its moment and ask what it'll take for
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India to seize its place as a global economic and geopolitical powerhouse.
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Joining me today in conversation is an expert panel from S&P Global.
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I'm joined by, Gauri Jauhar, executive Director of Consulting,
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for energy transition.
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Deepa Kumar, head of Asia Pacific Country Risk at S&P Global Market Intelligence
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and Atal Arya, chief Energy strategist at S&P Global Commodity Insights.
2:58
Atul, I'd like to come to you first.
3:00
Can you give us a brief overview of the India Forward, report, and, and how that
3:07
links into the work that the S&P Global Look Forward Council is doing on, you
3:13
know, delving into the potential of these huge, economies like India at the moment.
3:19
Yeah.
3:19
Thank you Andy.
3:20
It's great to join you and, and Deepa and Gauri for this, podcast.
3:24
And so, so as you know, as our, our, listeners will know, S&P Global, has
3:29
something called the Look Forward Council, which is our Thought Leadership group is
3:33
made up of our colleagues across all of the enterprise from different divisions
3:38
and the India research chapter, which
3:40
Deepa and Gauri launched a couple of years back is, is focusing
3:44
on the key dynamics in India.
3:47
And this report, the India Forward report is the third in the series of reports
3:51
we have done, at least the fourth in the series of reports to be corrected.
3:55
We have done on India.
3:56
The first was done under the umbrella of the Look Forward Council.
3:59
And the next, this was the third one being done under the umbrella
4:03
of the India research chapter.
4:05
And each of these reports we look at many different aspects of India.
4:10
And given what is happening both in the global context and in India at
4:14
this time, it's very timely, report.
4:19
So, moving next to, you know, Deepa and Gauri.
4:25
Given the focus of the report, how is in, in, in, in India leveraging
4:30
its domestic strengths at the moment?
4:32
Of course, huge economy, huge population, and huge potential, for growth.
4:36
But it's, it's also an economy in a country of many contrasts.
4:40
So can you give us a, an idea of, you know, around these issues, the adaptive
4:44
policymaking and how the country's maintaining its resil resilience, really
4:49
in, in what is a pretty volatile world?
4:52
Where, you know, lots of other countries and economies are
4:54
getting buffered by external shocks like tariffs or policy changes.
4:59
Yeah.
4:59
Thank, thank you for that question, Andy, and good to be here with you,
5:02
and Atul and Gauri and very true point I think one my favorite quotes
5:06
about India is everything that you say, even the opposite can be true.
5:09
So it is indeed a land of contrast.
5:12
And that's a good segue to, you know, how we're looking at some of these, trade
5:15
strategies and other economic strategies that India is applying this year.
5:19
It's a story essentially of how India balances its domestic
5:22
buffers and some of the external challenges that have developed.
5:26
What helps India is that it's still a very domestically driven demand economy.
5:30
So what we've seen recently is say, you know, even with some of the announcements
5:34
for rationalizing the goods and services tax, it's pretty clear that the
5:37
government is, you know, putting that impetus more towards private consumption
5:41
and shoring up the domestic economy.
5:43
Having said that, it's, it's not a trade averse country.
5:47
It's just a country that likes to choreograph its trade very
5:49
specifically towards domestic needs.
5:51
So what we're going to see is more of that choreographing happening, which
5:55
involves both goods and services.
5:57
So it, we always say that looking at services as,
6:00
important for India as it is just looking at goods and there's room to grow, right?
6:05
Right now, only 2% of the global market is Indian goods, and 4% of
6:09
the global market is Indian services.
6:11
So they definitely wanna push that number up and do it in a diversified way.
6:15
Right now, most of the traders located with a few countries and a few pockets.
6:19
The idea is link trade with political trust, but ensure that it allows for
6:24
greater integration of Indian goods and services and inward capital flow
6:28
that allows for domestic manufacturing to grow in the decades to come.
6:33
Deepa, could I just delve a little bit more into that?
6:35
It's a really interesting point you make.
6:37
You know, in that manufacturing space, I think that India, you know, traditionally,
6:40
certainly in the last 10, 20 years, you know, it has a presence globally
6:44
as a, you know, when we talk about finished commodities like steel for
6:47
example, you know, there is a, a, a a cost benefit producing steel in India.
6:52
But do you see India moving more into the more high value manufacturing sectors,
6:57
let's say electronics, for example?
7:00
Absolutely, and I think electronics is a great example of that.
7:03
It's already started happening.
7:05
India smartphone exports specifically have significantly grown over the
7:09
last year and they are one of the more important, exporters of that.
7:13
I think what is important.
7:15
And is going to factor more is the position of labor and the
7:18
fact that India is also trying to maximize its demographic, dividend.
7:22
It's happening at a time when the rest of the world is getting older and it's
7:26
getting not as skilled as India is.
7:29
And that is a regional competitiveness edge also that India can offer
7:32
compared to, you know, say other players in Asia Pacific.
7:35
So they do wanna move up the value chain.
7:37
There are, dependencies on either side of the value chain, but that's
7:41
absolutely the gameplay here.
7:45
Gauri, if I can come to you now, on this question.
7:49
You know, we caught up at the beginning of the year at India Energy Week.
7:52
I was blown away, at the, the scale of India Energy Week, actually, and
7:57
the level of participation and the, the, the caliber of international
8:02
policy maker that attended that event.
8:05
You know, how key is it for, for, you know, the, this engagement piece
8:09
for India when, you know, seeking to diversify its economy and, and
8:13
be adaptive to this world around it.
8:17
Absolutely.
8:18
First of all, again, delighted to be here on this podcast, with my,
8:21
colleagues, Atul and Deepa and yourself.
8:27
I think, it's, you, you know, in this new world where, new
8:31
partnerships are being looked at.
8:33
I think we've seen some news come out last week as well, in terms of,
8:38
new geopolitical reordering, which of course, Deepak can comment a lot more on.
8:42
But I think as it affects, the economy and the energy picture, what
8:46
we see is that, there is a lot of.
8:51
While India looks outwards, India still retains that inward focus
8:54
of, you know, looking at what more deregulation needs to happen.
8:58
We saw deregulation measures, which are, which are covered in our macro
9:02
article in the, in our journal, which.
9:05
Point towards ease of doing business.
9:07
So it's important to watch out for that.
9:09
Deepa earlier mentioned about the GST rationalization that happened last,
9:14
week as well, which was announced.
9:16
So I think what we are seeing is a concerted effort by the government
9:20
to debottleneck the economy, the domestic economy more, because
9:24
it's, it's what the government still can retain more control over.
9:28
We've seen it and we've discussed about it even in our earlier, you know.
9:34
Chapters in our earlier journals wherein.
9:37
We talked about, the importance of schemes like Atmanirbhar Bharat,
9:41
which is, you know, make, sort of making India, making India resilient,
9:46
making India self-sufficient.
9:48
The production linked incentive schemes, which, you know, cut across, more than
9:53
a dozen sectors, including electronics, including advanced cell chemistries,
9:58
including solar pv manufacturing.
10:01
So I think there's a concerted effort cross sector.
10:04
To unleash manufacturing.
10:06
It is tough though.
10:08
There has been this forever target of 25%, of gross value added of GDP
10:14
to be coming from manufacturing.
10:15
And it's, it's tough to reach that target because we are a services led economy.
10:20
That's by our very nature.
10:22
And it points to the big, you know, demographic dividend, the,
10:25
the talent pool of engineering, talent also that sits in India.
10:30
So I think it's, it's again, you know what Deepa talked about earlier about balance?
10:36
I think India's, definitely, making sure that the domestic houses in order
10:43
so that all reforms that are required are at least looked into and, and
10:48
hopefully taken, or are able to be taken.
10:51
If, if, if you will.
10:54
So you alluded there to, you know, some of the, your current news that we see.
10:58
Obviously India is a key member of the, the, the bricks.
11:01
Partnership of Nations, geopolitics for India is a key, element to this
11:08
story, and I think that it's fair to say India plays a, you know, a, a,
11:11
a a very kind of smart role globally in, in terms of being in the middle.
11:17
It's a bridge almost between, you know, two, I won't say opposing
11:21
forces, but certainly different ideological views on the world and
11:26
economics and, and, and politics.
11:29
How do you see that evolving deeper and, and how, you know, challenging
11:34
is it for India to kind of maintain that, that central position really.
11:39
You know, I think, Andy, this is a good time to look back at history.
11:43
This is, this is not unique.
11:45
This is one of the reasons that India chooses to be a bridge power,
11:49
as we called it, even in a couple of previous editions of India forward.
11:53
It is very much the strategy, it is not the, it is not the backup strategy.
11:58
It's absolutely the forefront.
11:59
You know, to use a cricket reference, it's the one that India likes to play
12:02
on the front foot, is that it wants to be the bridge power between advanced
12:06
economies, emerging economies, countries that have different political alliances,
12:11
political sort of systems that work at play, and see how to leverage all
12:15
of those together for India's benefit.
12:18
So this is the reason why India has a policy of strategic autonomy,
12:21
which is coming to play here.
12:23
There's absolutely nothing to suggest that there is a one side preference.
12:28
Like, you know, we mentioned BRICS.
12:29
BRICS is an important forum for India.
12:31
The quad is an equally important forum for India.
12:34
They would not find themselves in a position where they
12:37
have to pick either or.
12:38
They would like to work with as many partners as possible, as India calls
12:41
it, multi alignment and see how that can be leveraged to the benefit of
12:46
some of these interests that India has.
12:48
So when it comes to doing trade, when it comes to doing business, they would
12:51
like to do business with everyone when it comes to averting security risks, because
12:55
averting security risks is actually a big part of India's foreign policy strategy.
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That is also something that they'd like to do both in a near context,
13:03
which is in India's neighborhood, and in a further context as that.
13:06
So we're going to see more of what is on display right now, which is, you
13:10
know, actually a sort of, demonstration of India's strategic autonomy in play.
13:15
And, and not less of it.
13:17
It's, it's unlikely that we move away from this.
13:19
We'd only gonna move closer towards this.
13:21
And we have a framework called like India's concentric circles, which
13:25
is something that we've worked out within, within, you know,
13:27
the country risk as team as well.
13:29
And it shows that actually within India's first circle.
13:32
Our countries of different political strategies and different ends
13:36
of the economic models as well.
13:37
Because within India, if you look at different states of India, actually,
13:41
there are different economic models and it's important to make all of
13:44
those work together towards this kind of goal that India has set
13:47
for itself, both as a geopolitical powerhouse and an economic powerhouse.
13:52
So to say, I mean, that segues nicely that point to, the
13:55
question around energy transition.
13:57
And I think overall just the importance of energy security for, for India, you
14:04
know, it was a key theme of, India Energy Week and you know, from my
14:09
own perspective as a reporter, when I was based in the Middle East.
14:12
Something like 20 years ago.
14:14
You know, I could see then the level of, of engagement that the Indian government
14:17
gave, you know, some of its major partners in the Middle East in terms of, you
14:21
know, that supply consumer relationship.
14:24
Atul I'm gonna come to you on this.
14:26
You know, you are an internationally renowned thought leader on the
14:29
issue of not just energy transition, but also energy, security.
14:35
I mean, how does all this translate to, you know, India's policies around, you
14:40
know, diversifying each energy supply mix, energy security, and, and guaranteeing
14:45
that it's got these, you know, these key commodity building blocks for the future.
14:49
Yeah, so I think a couple of things we should, remember.
14:51
One is that for India, as at the, at the government level,
14:55
energy security is paramount.
14:57
You know, access to reliable and secure energy and affordable energy.
15:02
Many people, you know, hundreds of millions of people, are very poor and they
15:06
can only afford a little bit of energy.
15:08
So that's the number one priority for the government of India.
15:11
At the same time.
15:13
You know, the environmental issues, particularly local air
15:16
quality is also very important.
15:18
That's why a number of things have been done over the years.
15:20
For example, to move from diesel and petrol to CNG, compressed natural gas
15:26
as a means to fuel transportation, reducing smog and, and, emissions.
15:31
But provision of secure energy is paramount, and, and
15:34
that's what we are seeing.
15:35
The, the strategy of getting, you know, some of the oil supplies or more of
15:39
the oil supplies now, for example, from Russia, which were encouraged by, the,
15:44
the US and other global powers to balance the global market, as you know well.
15:49
So beyond that, you know, India has a lot of domestic resources,
15:53
coal and renewable resources.
15:54
And what I see happening, you know, the term I coined a few
15:57
years back energy edition.
15:59
But we are seeing now both the energy edition, more energy being
16:02
used, but also energy transition.
16:04
We are seeing significant growth in, for example, in renewables and other cleaner
16:09
sources of energy, biofuels, hydrogen, all of these things are coming up.
16:13
So a very balanced view, but at the same time, making sure there is provision of.
16:18
Clean and, you know, increasingly clean and secure energy.
16:21
But perhaps Gauri, you can expand on some of the things happening
16:25
on the ground on, on this front.
16:27
Sure.
16:27
Atul.
16:27
I mean, absolutely.
16:29
I, I think what you point on energy security is paramount.
16:32
And as the times we're in definitely show that, that focus of the government.
16:37
And I think I'd also, you know, looking at the energy
16:40
transition, I think India always.
16:42
Took a little more balanced approach, its target of 2070.
16:47
Net zero showed it.
16:49
I think when India came out with that target, there were a lot of questions
16:51
like, why 2070 and why not 2050?
16:54
And today we're in a world which is anyways questioning 2050 net zero and 1.5.
17:00
so I think India's path seems more considered, um.
17:04
Connect the dots.
17:05
Back to your earlier question though, Andy, which was on the domestic focus.
17:10
What we have seen in energy, is also new missions being announced.
17:16
One new mission, which we talk about in our, journal is the mission on
17:20
nuclear, where there's a target of a hundred gigawatts of nuclear from
17:24
nine gigawatts currently, by 2047.
17:28
And, we also see from Atul's point on the energy security
17:33
side, a new mission, on Deepwater.
17:37
So to really pull out all the plugs on at the basin levels to
17:42
make sure exploration is complete in the frontier, deepwater basins.
17:46
So we see these two missions being announced in quick succession
17:50
in the last couple of months.
17:52
One on nuclear and one on the deep water mission and the deep water
17:55
mission one was just announced, during India's Independence Day.
17:59
So that's why I think there is a balanced approach.
18:01
But as Atul said, energy security is paramount.
18:05
If the lights are out, they're out.
18:06
So we do need energy security, and energy addition as Atul mentioned,
18:13
you know, at, at the same time we find measures to transition.
18:17
And I think, I think the one thing I would add is that for India, when
18:21
we talk about energy transition.
18:23
Air pollution is more the here and now of a climate change issue than, than,
18:29
than it's just meeting a net zero target.
18:32
One of the most eye-catching parts of the report.
18:35
Is this section around nuclear power.
18:38
And you know, I, I think, you know, it's fascinating when you position that in,
18:43
in, you know, I wouldn't call it a rush to nuclear power globally, but you know, it,
18:47
it, we are seeing a resurgence of this.
18:49
I mean, what challenges do you think India faces in terms of, you
18:52
know, building scale in that, that that nuclear space going forward?
18:57
So I think the main challenge is on liabilities.
19:00
What is the capping of liabilities?
19:03
What is the extent of liabilities?
19:05
And there are two key acts, which will have to be, considered very carefully,
19:11
both in the context of the larger US India relationship, to access
19:15
technologies, but also in the context of, private sector participation.
19:20
Because that,
19:21
will need to be encouraged to get those technologies, to enable
19:25
this a hundred gigawatt target.
19:27
And, and that is going to be tough.
19:29
And I think the environment now has made it tougher.
19:33
I mean, a hundred gigawatts as well.
19:34
I mean, can, can we frame that in the global context?
19:37
I mean, that's gotta be one of the biggest nuclear programs
19:39
in the world, I would imagine,
19:41
currently, right?
19:45
Yeah, it is, it is very large indeed.
19:47
You know, and actually, you know, if you look at the world, nuclear
19:49
associations kind of, roadmap for the future of nuclear, India is one of the
19:55
top 10 countries in that, you know, you know, China of course still has a lot of
19:59
nuclear and still coming up with nuclear.
20:02
But India is also, people forget that India has established nuclear
20:05
power generation program already, you know, existing for, for decades.
20:10
And I think, but it slowed down, you know, for various reasons like.
20:13
Lack of access to enriched fuel and so on.
20:16
But now the, the opportunity is there.
20:18
I think the one thing Gauri mentioned is the involvement of the private
20:21
sector, which has been off the books, but now they, they can, they
20:25
can play a very important role and once these bills are passed in the
20:29
parliament, then I think there'll be.
20:31
We see a big growth, from our S&P perspective, growth in
20:35
the nuclear activity in India.
20:37
They need to build supply chain as well, Andy, in terms of what some of the things,
20:41
you know, they'll need capability, they'll need, you know, you know, supply chain.
20:45
Yeah, exactly.
20:45
Yeah.
20:46
Yeah, absolutely.
20:47
I mean, on that theme around the industrial ecosystem that
20:51
you need to build up for these.
20:53
Very complex industries.
20:54
I think ship building is another area in the report that was focused
20:57
on, which I think is fascinating.
20:59
A colleague of ours pointed out to me recently actually that, that I think
21:02
something like over half the world's, seafarers are of, you know, Indian
21:08
national nationality, which is, you know, just at the very basics, it gives you a
21:12
sense of how important maritime industries are for, for India and the Indian economy.
21:18
But it's, it's not just actually, you know, serving seafarers.
21:21
It's it's actual ship building.
21:23
Can you give us a little bit more insights around that Gauri?
21:27
So I think currently, India sits, in the center of servicing smaller, medium
21:34
you know, services around shipbuilding.
21:37
But there's clearly an ambition right now.
21:39
It's, it's, very insignificant.
21:42
But we do see an impetus going forward.
21:44
We explore it in much detail in our, journal and I think, where we, there are
21:50
challenges, of course, in terms of a lot of regulatory, bottlenecks that would
21:55
still be un un you know, un unleashed.
21:59
So if those can be achieved, but, but you know, we compare it to, other countries
22:04
in the neighborhood like South Korea and, you know, where this has been.
22:09
There's been a longer tradition of shipbuilding.
22:12
You know, India does have some distance to go.
22:14
Yeah.
22:15
Lemme very briefly add, Andy you know, India is currently
22:17
1% of the global shipbuilding market and India's goal, by 2047.
22:22
And by the way, we make a reference to 2047.
22:24
Throughout the journal and there is a very significant importance to
22:27
that because that'll be the hundred a year of India's independence, you
22:31
know, became independent in 1947.
22:33
So it it, the goal is to become one of the top five.
22:36
So from 1% to top five.
22:38
I mean, you know, that's a huge ambition.
22:40
And, and, and the shift will be from more kind of.
22:43
Defense relationship building to more civilian merchant, you know,
22:47
tankers, LNG carriers and so on.
22:50
So it's a massive ambition.
22:51
One great thing about India, as we know from the geography
22:55
is it has a massive coastline.
22:57
So, you know, it's sort of a natural thing that you use the power of sea.
23:00
But it has not, it has been very under leverage.
23:03
And this is.
23:04
This is, again, going back to what Depa was saying about the demographic
23:07
dividend, you know, if they can unleash this, and that's why we talk about in
23:10
our article, there could be huge gains in terms of employment at the high,
23:14
high quality, you know, high value employment in the ship building sector.
23:18
So, big ambition, time will tell.
23:21
Yeah.
23:21
May I quickly add a point, Andy?
23:23
I mean, of course.
23:24
To compliment what Arthur is saying, that 270 degrees of, India's coastline is, is,
23:30
is, you know, waiting to be maximized.
23:31
But the states that dot the coastline are also among India's fastest
23:36
and most important growing states.
23:37
So you need to.
23:39
Sort of integrate them into the global trade ecosystem a lot more strongly.
23:43
If you want, you know, tying back to that trade piece, which we're saying,
23:46
which is that India is trying to become a bigger trading economy in the world.
23:50
Not just that if, if you just look at even some of the overlapping of
23:54
strategic interests that has happened where, you know, shipping lines are more
23:57
vulnerable to geopolitical risks now.
24:00
You need Indian interests to be out there more upfront and center.
24:03
And less dependent on other economies, or other sort of, modes of trade.
24:07
And it's something we said in the previous journal, that actually Indian
24:10
trade is more than 90% seaborne already.
24:13
So why not do it on Indian ships when you can.
24:17
Yeah, it's, it, it, it makes good strategic sense from
24:20
a, an industrial standpoint.
24:21
And you see this in so many other major global economies.
24:24
I mean, South Korea is a good example.
24:26
I think one of the things that we haven't talked about though, which we need to
24:30
delve into because it's really what glues all this together, is finance.
24:34
And you know, one of the really interesting things, things that's
24:37
come out of the report is, is the potential growth of, of, of private
24:40
credit markets in, in India and how, you know, as well, global investors,
24:45
will play an important role there.
24:47
Deepa, do you just wanna unpack that for us a little bit?
24:50
Absolutely Andy, and, and I think it ties into, again, some of the themes, right?
24:53
Like Gauri and I like saying that our journal is effectively connective tissues
24:57
speaking to each other throughout.
24:59
And if there's anything that Atul, Gauri, and I have said so
25:01
far is that India loves options.
25:03
They think the more there are options on the table, the better
25:06
for India to meet a lot of its goals that it has across the spectrum.
25:10
And private credit is exactly that.
25:12
So it is, it is an, as our authors to credit them, right?
25:15
Like they speak of it, that has gone from a young upstart to a thriving asset
25:19
class in literally within a decade.
25:21
And it's there to see because actually what started and what is, you know, we
25:24
highlight in the paper is, is private credit grew because it's financing that
25:28
has grown in sectors that banks don't.
25:30
Usually go to, or there are regulations around where banking
25:34
can sort of, you know, speak to.
25:36
And so some of the sectors that have come up, infrastructure, real estate, renewable
25:40
energy, and traditional energy are actually some of the biggest beneficiaries
25:44
of private credit in India today.
25:45
And it's likely to grow in those sectors, in those spaces as well.
25:50
Mumbai International Airport is a great example of, you know, private credit
25:53
coming to sort of shore up a very big and strategic infrastructure project.
25:58
What is important though, and something that we're watching out for is
26:01
the private credit market in India has only grown during an up cycle.
26:05
We don't know how it performs during a down cycle, so that
26:08
is something to watch out for.
26:09
And second is, it's a bit riskier than traditional lending, especially with the
26:13
kind of guarantees that comes with banks.
26:15
So it's, it's something that investors will be looking out for.
26:18
But yeah, debt issuance last year, as we know of was maybe about 4%.
26:22
We're looking at that going, sorry, at about 10 billion and at 4%.
26:27
We're looking at that significantly increasing in the coming
26:30
years, both because of global investors and domestic investors.
26:34
And that need for infrastructure.
26:36
I mean, you know, it's, it's, it's fascinating talking to you on the
26:38
podcast here because we can hear the hustle and bustle in the background.
26:43
There in India, which is, you know, what, what, you know, we all, you
26:47
know, I think as an external, you know, as a journalist, as an external
26:52
viewer of what's happening in India, you know, you get that sense on
26:54
the ground, the hustle, the bustle, the busyness, the rapid growth.
26:59
But what you know is, is, I won't say lagging behind, but is what's racing to
27:03
catch up is, is the infrastructure and.
27:06
You know, how big a challenge is that when you look out to and fascinated at
27:10
Al's point there that, you know, you're trying to forecast out to, to 2047, that
27:15
historic, centenary of independence.
27:20
How, how does that, how does that infrastructure piece factor into that?
27:24
I mean, the infrastructure piece is actually front and center, so yes,
27:27
the sounds around me are all sounds of, India growing and India thriving.
27:31
2047 is absolutely important because.
27:35
To commemorate the anniversary of the hundredth independence.
27:38
The Indian government has actually said that as the target for when India
27:41
should quote unquote be an advanced economy or a developed economy,
27:44
depending on how one defines it.
27:46
So everything that we've seen in government financing, especially
27:49
in capital expenditure this year and this year has been used from
27:52
a capital expenditure front is all going into infrastructure projects.
27:56
I mean, Gauri Atul and I have grown up and seen Mumbai.
27:59
You know, different stages and mobile looks very different now
28:02
than it did even say five years ago.
28:04
And the push there is absolutely on public infrastructure, private
28:08
infrastructure, but one that can accommodate a growing economy.
28:12
The question though, and we do raise that in in the macro pieces,
28:15
is how do you do it sustainably?
28:18
So in a way that, you know, speaks to some of the other risks that Gauri and Atul
28:21
have alluded to, which is balancing energy security transition and climate change.
28:25
And how do you do it in an inclusive manner?
28:28
Because as much as there is a part of India that keeps growing, there is a part
28:31
of India that's yet to grow, and that does need a lot of support that comes
28:35
from government and other industries.
28:37
So yes, infrastructure is, you know, galvanizing that India
28:40
that wants to become an advanced economy by 2047, but it needs to
28:44
be done sustainably and inclusive.
28:46
Right now, the government is the biggest player, but hopefully, you
28:49
know, as we say in private credit, debt and equity and financing gets
28:52
opened even for the private sector.
28:57
Another really interesting part of this report is the push into data
29:02
centers and how, you know, that's gonna be a key part of, of India
29:06
building, you know, its presence as a major force in Southeast Asia.
29:10
And I, you know, I find that, you know, fascinating in the global context
29:13
because we're now talking about, you know, certain countries in the world in
29:16
the sense of data center superpowers.
29:19
You know, I think there was a fantastic article I read recently about the
29:22
United Remits in Saudi Arabia and how they're, you know, using their huge
29:26
investments into AI and, and the creation of data centers to build, you know,
29:31
more influence internationally and, and, you know, are you seeing a similar
29:34
trend in, in, in India, Gauri with.
29:37
This push into the data center market?
29:39
And what are the challenges around that?
29:41
I mean, I'm guessing energy is a big part of it.
29:43
Absolutely.
29:44
Energy is an important part of it.
29:45
In fact, one thing we point out in our article is that energy expenses
29:49
are about 65% of the overall operating expenses of a data center.
29:54
And in the next, two years, we do see India becoming the second
30:00
largest market for electricity demand linked to data centers.
30:04
And what we are seeing is, you know, another topic which we talk a lot
30:09
about is this, sort of federal, state, federal interactions and,
30:14
you know, I think it's very close to Deepa and Atul's heart as well
30:18
talking about how the states interact.
30:20
And I think where that's where we are seeing states jostling with each other to,
30:24
incentivize data center investments in.
30:29
Through giving, certain incentives, cross subsidy, waivers, you know,
30:36
single window clearances, putting, the data center load in a category such
30:42
that it attracts either a lesser tariff in certain states like Maharashtra,
30:46
or linking, a lower tariff to a higher renewable energy usage like in Karnataka.
30:53
So, so we are seeing this.
30:55
You know, federal federalism, competitive federalism also playing out, in
31:00
the data center picture, as well.
31:04
So to wrap up, huge opportunity.
31:06
You know, I get a sense of this sort of common wheel approach to economic
31:10
growth that is being deployed in India.
31:13
You know, I think it's a great kind of sector to finish on how.
31:16
We started talking about provision for energy and energy security.
31:19
Obviously nuclear is a part of that.
31:21
And then you see the outcome.
31:22
It's all about powering manufacturing, powering new industries like ship
31:25
building, but also data centers, which is gonna be a huge driver for global growth
31:30
in the next 20, 30, 40 years and beyond.
31:33
I guess for our, our listeners, looking forward, what should they
31:37
be watching for in the midst of all these shifting horizons in
31:41
terms of India and and globally?
31:42
Deepa I am gonna come to you first on that one.
31:45
I think, I think
31:46
no pressure.
31:47
Slightly medium term view, Andy, not the, not the short term view, but I
31:51
think for me right, is, is always how India maximizes its demographic dividend.
31:58
The, the biggest strength of India or, or, you know, something that, that we'd
32:02
have to watch for is how it's labor force.
32:04
Gets utilized, how its people get applied, how its people are supported
32:08
to become bigger consumers, bigger parts of the economy, so on and so forth.
32:13
So I would think policies that are linked to either deregulation of labor,
32:17
policies that allow for, you know, India attracting foreign investment on
32:21
the bank of this point, that it's labor forces more regionally competitive.
32:25
How India inculcates more women into the workforce.
32:28
Looking at that as a factor is, is something that, you know, is most
32:32
important and, and something that we do mention in the journal as well.
32:36
But of course lastly, and, and because it's something that I speak to quite
32:39
common is, is the geopolitical space is, I would say that this is India
32:44
strategy where just after a while, seeing strategic autonomy play out in real time.
32:49
So definitely wanna watch out for that.
32:51
We probably see more of it and not less of it.
32:54
So maximizing India's demographic advantages for global growth.
32:58
Very interesting.
32:59
Gauri, what would be your take on this?
33:04
So I think, the linkage between economic and energy demand growth.
33:09
So, I think it's important to see that six and half percent is at least maintained.
33:14
And if, if the more the economy gets debottlenecked, if higher growth
33:18
rates are, there's always this.
33:20
The potential growth rate is actually somewhere in the eight to
33:23
10% range, and we have seen some years of it in the two thousands.
33:28
So, so can we again reach there or not?
33:31
I think that's a key test.
33:32
And when, I think in our modeling of scenarios, what we do see is.
33:37
That no matter which scenario you take, there's a certain point of inflection
33:40
in India happens around 2035, where per capita income really starts rising.
33:47
And, and one number to watch for is the $10,000 per capita income mark.
33:51
The moment countries in the World Bank classification meet that,
33:54
that's when points of inflection on energy demand also are typically seen
33:59
in our modeling, on, so on India.
34:01
So that would be...
34:02
How are we away from that 10,000 per capita income level?
34:06
Well, our modeling shows that towards, closer to 2040, the late 2030s,
34:12
2040s, I mean, it can move every year a little bit, but it, it's closer
34:17
towards 2040, the end, the end of the
34:21
That brings us, that brings us very, I mean you could have scripted
34:24
this, Gauri because it brings us very well to, our final word, Atul.
34:29
It goes to you, you mentioned this great, point around 2047 being
34:34
a historical moment, for India.
34:37
And, you know, that kind of is pretty close to that sort of timeline for
34:42
hitting, hitting that, key sort of metric, $10,000 per capita income.
34:48
You know, what, what's your overall outlook in the context of, of this
34:52
and the insights that are coming out of the, India forward report?
34:56
Thank you, Andy.
34:57
The, first thing I would say is to, our listeners that please, look at
35:01
the report, you know, download it.
35:03
It's all available electronically on the S&P Global.
35:07
Look Forward Council website and a lot of great, breadth and depth
35:11
of, interesting content and new ideas for our, our companies and
35:15
listeners to, to think about.
35:17
I think what I will be watching for is can India, I mean, I always feel
35:22
that India has so much potential.
35:23
There's so many advantages, right?
35:25
Very educated, middle class, good fluency in English, which is the global language
35:31
of commerce, entrepreneurial culture.
35:33
I mean, many Indians outside of India thriving in, in very senior
35:37
positions in in, in private sector and governments and so on.
35:41
So how do you bring that potential?
35:43
Back to India and make India also a, a, a real leader.
35:47
It's already is, but can it be a, a global player?
35:50
I, I think the, the geopolitical angle, in the very short term,
35:53
what we're seeing today is going to be a challenge to navigate.
35:57
But this is not the first time India's had to navigate to geopolitical challenges.
36:01
So I think it'll come true.
36:03
And what I, what.
36:04
Hope is that, you know, there is this, phrase in, in Hindi called Jugar, which
36:09
is kind of innovation, but innovation in like a bootstrap innovation.
36:14
And Indians are very good at that.
36:15
So I, I hope that that bootstrap innovation will really propel the country
36:21
in, in all the multiple dimensions.
36:23
We talk about in our, India forward, you know.
36:28
What is the India forward, new horizons or, or, you know.
36:32
Shifting horizons.
36:34
Shifting horizons.
36:34
Thank you.
36:35
Thank you.
36:35
Deepa.
36:35
Shifting horizons, edition.
36:37
That's a great, point to, to finish on, Atul.
36:43
You know, the spirits of innovation, and again, it, this one theme that
36:46
cuts through all of this conversation, which has been absolutely fascinating
36:49
is, is the human capital and, and you know, the intrinsic innovation
36:53
of, you know, the people of India and, and you know, which is.
36:57
From my personal, engagements as a journalist over the years, a
37:01
fascinating country always to visit.
37:03
I'm very pleased you've let me, you've, you've let me off
37:06
the hook all of you very well.
37:08
As an Englishman, no one mentioned the cricket, final test test match
37:12
in, in, in England this summer.
37:14
A fantastic sport in a little bit difficult to watch,
37:18
obviously from my perspective.
37:20
Um.
37:20
I, I, I would just like to thank you all as our Yes.
37:25
Yes.
37:26
I'd just like to thank you all as our guests.
37:28
Gauri Jauhar, executive Director of Consulting for Energy
37:31
Transition at S&P Global.
37:33
Deepa Kumar, head of Asia Pacific Country Risk, S&P Global Market Intelligence
37:38
and Atul Arya, a Chief Energy Strategist at S&P Global Commodity Insights.
37:43
As Atul mentioned, if you wanna download the look forward, report, the India
37:48
Forward report, shifting Horizons, go to our website at www.spglobal.com.
37:55
Look for The Look Forward Council, tab.
37:59
You'll be able to find information on the report and much more resources
38:03
around what we're doing, in the space of global economics and forecasting what the
38:08
world has in store for us in the future.
38:10
Thank you all and, remember to download, this episode and many other episodes
38:15
that we are gonna produce on the Apple Podcast store or Spotify or via YouTube.
38:21
Thanks very much.