From digital technology to green energy, India is seeing big shifts across many areas. These big changes, also called megatrends, are shaping the future of the country. If you are an investor, either new or experienced, these trends can offer potential long-term growth opportunities.
In this article, we’ll take a closer look at five important megatrends that may shape India’s future. Each trend may bring potential investment themes.
The digital economy is growing quickly
India is going digital at a fast pace. More people are using smartphones, the internet is getting cheaper to use, and digital payments have become common. From banking to shopping, everything is moving online.
Why this is relevant for investors:
- Digital platforms like e-commerce, fintech and online education are expanding.
- According to a 2024 report by the Confederation of Indian Industry (CII) in collaboration with McKinsey & Company, India's unicorns and startups, particularly in digital sectors, have the potential to contribute $1 trillion to the economy by 2030.
- Start-ups in sectors like digital health and online learning are attracting investor interest.
- The government’s Digital India mission is facilitating faster adoption of digital tools.
Also Read: What is megatrend investing?
Green energy is turning into a big opportunity
Clean and green energy is a key area of focus. India aims to reduce its dependence on coal and oil and is investing in renewable sources like solar, wind and green hydrogen.
Why this matters:
- In 2024, India overtook Germany to become the world’s third-largest producer of wind and solar energy, according to a report by Ember, a global energy thinktank.
- The country aims to reach 500 GW of renewable energy capacity by 2030.
- Global investors are already showing interest in Indian green energy firms.
Manufacturing in India is getting stronger
As India seeks to become a global manufacturing hub while also boosting self-sufficiency for its own manufacturing needs, The "Make in India" and "Production Linked Incentive" (PLI) schemes are encouraging more domestic production.
- Sectors like electronics, mobile phones, semiconductors, and textiles are seeing increased activity.
- According to Deloitte, India aims to raise the manufacturing sector's contribution to 25% of its GDP by 2025, aligning with national policy objectives.
- Global companies are shifting supply chains to India to reduce dependence on China.
The rise of a young, spending population
India has one of the youngest populations in the world. Young people are earning and spending more on experiences like travel, shopping, food delivery and fitness.
Why this trend may be significant:
- A large working-age population suggests long-term consumption potential.
- With India projected to become the world's third-largest economy by 2027, driven by factors such as global off-shoring, digitalisation, energy transition, and a rapidly expanding middle class.
- Sectors like entertainment, food, fashion, and travel are expected to see increased consumer engagement.
Rising demand for healthcare and wellness
More people in India are now focusing on health and wellness. From gyms to organic food to online doctor consultations, the sector is evolving.
Why it matters now:
- Health insurance coverage is rising in India, with much more room to grow.
- Investment in hospitals and healthcare infrastructure is rising, supported by both government initiatives and private sector participation, to improve access and quality of care.
- The pandemic increased the use of telehealth and wellness apps.
- According to PwC, India’s healthcare sector has grown to $372 billion in 2022, driven by rising incomes, greater health awareness, and expanded insurance coverage.
Also Read: What is Growth Investing?
Conclusion
Megatrends are influencing India’s economic and social landscape and may present potentially suitable investment opportunities.
If you choose to follow these trends, consider starting with a small amount and increasing gradually. Always research thoroughly before investing in a sector or company. If unsure, diversified investment vehicles like mutual funds may be a suitable starting point.
Remember, large-scale trends take time to unfold, and long-term discipline is key.
At Bajaj Finserv Asset Management Ltd, we aim to harness the power of megatrends by offering investors access to themes shaping the world’s future — from clean energy to technology, innovation, demographic shifts and more. Many of our funds follow a megatrends investment approach to help you participate in these long-term shifts, with a focus on growth potential and diversification. Build your future-focussed portfolio with Bajaj Finserv AMC.
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