India must generate at least 8 million jobs annually over the next 10 to 12 years and significantly increase the contribution of manufacturing to its GDP if it is to realise its ambition of becoming a developed country by 2047, according to Chief Economic Adviser V Anantha Nageswaran.
Speaking at the Columbia India Summit 2025, hosted by the Deepak and Neera Raj Centre on Indian Economic Policies at Columbia University's School of International and Public Affairs, Nageswaran outlined the economic challenges ahead for India.
He stressed that the country’s large population and an increasingly complex global environment would make the journey towards development a difficult one.
He noted that the global external environment would not be as supportive in the coming decades as it had been in the past. "Unlike the relatively benign period from the 1990s onwards, the coming 10–20 years will pose greater challenges due to geopolitical tensions and shifting economic priorities worldwide," he said.
To stay on track for the ‘Viksit Bharat 2047’ vision, Nageswaran emphasised the need to create 8 million jobs every year and to raise the share of manufacturing in the GDP, particularly in light of China’s dominant position in global manufacturing, especially since the COVID-19 pandemic.
He also pointed out that modern technological developments—such as artificial intelligence, robotics, and automation—present additional challenges. “AI may threaten entry-level and IT-enabled services jobs. Preparing the workforce for an AI-driven world is crucial, but equally important is balancing labour-intensive employment policies with the adoption of new technologies,” he said.
Nageswaran warned that India cannot follow the same developmental path as past industrial powers, who did not face today’s technological upheavals. Instead, India must make conscious choices, guided not just by technologists but also by policymakers, to ensure inclusive growth.
The Chief Economic Adviser highlighted the importance of integrating Indian businesses into global value chains and strengthening the small and medium enterprises (SME) sector. “No country has become a manufacturing powerhouse without a strong SME base,” he said.
He also discussed the need to either boost investment rates or derive maximum value from existing investments, as global capital flows are likely to be affected by ongoing geopolitical conflicts.
“External trade will continue to be relevant, especially as a driver of domestic innovation and competitiveness. However, we cannot rely on exports to fuel growth as heavily as in the past.”
He explained that while exports contributed significantly to India’s GDP growth between 2003 and 2008, their contribution has declined in recent decades and may fall even further in the future. "Improving quality, research and development, logistics and connectivity will be key, but we must also recognise that export-led growth may no longer be the primary engine," he cautioned.
Despite these challenges, Nageswaran said India’s post-COVID recovery has been strong, with average GDP growth of over 8% in the past three years. However, he acknowledged that maintaining such growth rates would be difficult.
A more realistic target, he suggested, would be to sustain growth of 6.5% annually, with occasional spikes above 7% driven by domestic reforms and deregulation.
His comments come as the United Nations Conference on Trade and Development (UNCTAD) recently projected India’s growth at 6.5% in 2025, citing robust public spending and an easing of monetary policy, even as the global economy faces heightened trade tensions and uncertainty.
The summit at Columbia University drew academics, students, policy analysts, and economists, with discussions centred on India’s economic future, innovation landscape, and role in global trade.
Reflecting on the road ahead, Nageswaran said, “The task is immense, but with strong policy resolve and clear priorities—especially in deregulation—we can maintain our growth advantage, even in a tough global environment.”
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