President Trump’s policies are likely to affect many countries. But the relationship between the United States and India is broad and very deep. We have released our latest annual World Trade Report. We forecast India’s total trade to grow significantly by $1.8 trillion annually through 2033. Among the drivers is India’s growing popularity as a production hub for companies looking to diversify their supply chains in response to the new geopolitical and economic environment. Annual trade with the United States is expected to more than double over the next decade, reaching $116 billion by 2033. This trend will reflect the strengthening of political and economic ties between the world’s two largest democracies, particularly in the areas of defense and technology. As India aims to become a developed economy, major structural reforms will be needed by 2047. What major reforms would you recommend?
India needs to continue to improve productivity and create a positive environment for global companies to invest. This means addressing large-scale physical and digital infrastructure advances and complexities within India’s company law and tax system. Free trade zones are one possible route. India also needs to create the right environment for increased investment in research and development. The current level of 0.6% of GDP is well below the 2.4% and 3.5% of China and the United States, respectively. Additionally, employee upskilling will continue to be a key driver of success.
Which emerging industries could be the main drivers of India’s growth towards a $10 trillion economy?
India could focus on four drivers of growth. It is the “sunrise sector” which includes solar module and battery manufacturing to meet domestic and global demand. Labor-intensive industries such as textiles and toys. strategic sectors such as electronic components and defence, where India aims to become more self-reliant, and high value-creating industries such as pharmaceuticals, where India is already the world’s third-largest manufacturer. What level of rethinking is required from corporate-level leaders to address this volatile geopolitical landscape, rapid technological disruption, persistent inflation, and the complexity of an increasingly connected world? Is it?
It will be important for business leaders to decide how to productively engage with governments and build so-called “geopolitical power.” It means strengthening their and their organizations’ ability to sense and respond to a rapidly changing and increasingly diverse geopolitical landscape. In practice, this means spending more time preparing for different geopolitical scenarios to ensure that businesses can not only manage risks but also be flexible enough to seize opportunities. .
Which aspects of consulting are likely to remain the same and which aspects do you expect to evolve over the next 3-5 years? How is BCG preparing?
The pace and scale of change at BCG is accelerating faster than at any point in my 36-year career. In this case, the reason change is happening faster is not only our activities, which continue to change over time, but also the way we work. Much of that transformation is being driven by AI.
Is the rise of AI increasing demand for BCG’s services? Do you expect the AI hype cycle to slow?
AI already generates more than 20% of global revenue, and demand continues to grow rapidly. Business leaders are under added pressure this year to turn AI’s potential into profit. So if anything, the demand for AI support will increase significantly.
