By Manish Khurana
For nearly two decades, India’s economic rise has largely been celebrated through the lens of consumption. A growing middle class, rapid urbanisation, digital adoption, rising incomes and aspirational spending transformed the country into one of the world’s most attractive consumer markets. Global businesses looked at India as a vast marketplace—a nation of buyers, users and consumers.
But the next decade cannot be built on consumption alone.
To understand why, we must first understand India’s economic journey.
In the early 18th century, India accounted for nearly 23 per cent of the global economy. Centuries of colonial exploitation, however, reduced that share dramatically. By the time India gained Independence, the nation’s economic foundations had been severely weakened, and rebuilding became an urgent priority.
In the decades that followed, the government assumed the central role in economic development. Public sector expansion, bank nationalisation and agricultural reforms laid the groundwork for growth. The Green Revolution transformed food security and significantly improved agricultural productivity, while the nationalisation of banks expanded access to credit and strengthened economic participation.
The 1980s marked the beginning of a shift. Restrictions on private enterprise gradually eased, paving the way for broader economic reforms. The watershed moment came in 1991 with the Liberalisation, Privatisation and Globalisation (LPG) reforms, which opened India’s economy to global markets and foreign investment.
The results were remarkable. Between 1980 and the early 2000s, India emerged as one of the world’s fastest-growing economies. A young population, competitive labour costs and a strong English-speaking workforce positioned the country as a preferred destination for investment and services-led growth.
Since then, India has navigated multiple economic disruptions—from the global financial crisis of 2008 and demonetisation in 2016 to the unprecedented challenges posed by the Covid-19 pandemic. Yet the economy has demonstrated resilience and adaptability. Supported by digital transformation, infrastructure development and policy reforms, India today stands among the world’s fastest-growing major economies.
However, a critical question now confronts policymakers, businesses and entrepreneurs alike: What should power India’s next phase of growth?
Transition to Influence
The answer lies in capability creation.
Consumption creates economic activity. Capability creates national strength.
A country does not become globally influential merely because its citizens consume more goods and services. It becomes influential when it develops the ability to manufacture, innovate, design and export products, technologies and solutions that the world depends upon.
This vision has increasingly shaped India’s economic priorities over the past decade. Initiatives such as Make in India, the Production Linked Incentive (PLI) schemes and the India Semiconductor Mission reflect a strategic effort to strengthen domestic capabilities in sectors critical to future competitiveness.
The timing could not be more important.
The global order is undergoing a profound transformation. Supply chains are being reconfigured. Geopolitical tensions are reshaping trade relationships. Technological self-reliance is becoming central to economic and national security. Across the world, countries are racing to secure strategic capabilities in semiconductors, defence manufacturing, artificial intelligence, clean energy, cyber security and advanced infrastructure.
India cannot afford to remain merely a consumption market in this emerging landscape.
The country needs stronger manufacturing ecosystems, globally competitive MSMEs, research-led institutions, advanced industrial capabilities and world-class supply chains. We need more factories with technological depth, not just more platforms with user growth.
Reconfiguring Capital
Equally important is the challenge of human capital.
India’s demographic dividend will yield results only if the workforce is productive, skilled and innovation-oriented. Degrees alone will not define future competitiveness. Technical expertise, industrial training, applied research and entrepreneurial execution will.
Our education system must evolve from producing job seekers to nurturing problem solvers, creators and institution builders.
Capital allocation also deserves attention. India’s next decade cannot be financed solely through speculative investments chasing rapid valuations and short-term exits. The nation requires patient capital—investment willing to support manufacturing, infrastructure, research, operational excellence and long-term enterprise creation.
The MSME sector, in particular, must become central to India’s capability agenda. Easier access to finance, technology adoption, simplified compliance frameworks and institutional support can transform MSMEs into globally competitive enterprises and critical contributors to national growth.
None of this implies that consumption will become irrelevant. Consumption will continue to remain an important engine of economic growth. But it must be supported by a stronger foundation of productive capability.
India possesses all the ingredients necessary for this transformation—entrepreneurial energy, demographic scale, digital infrastructure, policy momentum and growing geopolitical relevance.
Yet history is not shaped by potential. It is shaped by execution.
The coming decade will determine whether India remains primarily a market for global businesses or emerges as a nation capable of building globally relevant industries, technologies, institutions and intellectual property.
This is not merely an economic transition. It is a national imperative.
The countries that shape the future will not necessarily be those that consume the most. They will be the ones that build the most enduring capabilities.
(The author is founder of Innovations Venture Studio)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.