India set to become high-income country by 2047 buoyed by services sector: Report

India is set to become a high-income country by 2047 with a projected GDP of USD 23 trillion to USD 35 trillion, buoyed by the services sector, a report has said. By 2047, the services sector is projected to make up 60 per cent of India’s GDP, while manufacturing will account for 32 per cent, both becoming crucial drivers of economic growth, the report by Bain & Company and nasscom said. “With nearly 200 million individuals expected to enter the workforce in the coming decades, India has a unique opportunity to drive high-value job creation and unlock significant economic potential,” the report said.

A sectoral technology roadmap could play a pivotal role in enabling this transformation, it noted.

Advances in Al-driven chip design, touchless manufacturing, and backward integration into component manufacturing and design could enhance cost competitiveness and innovation, driving the sector’s export share from 24 per cent to 45 per cent-50 per cent by 2047 and its GDP contribution from 3 per cent to 8 per cent-10 per cent.

India’s proportion of renewable energy in its total energy production could increase from 24 per cent in 2023 to around 70 per cent by 2047, it noted.

Likewise, the auto-component export sector is projected to reach USD 200-250 billion (2047) driven by share capture in ICE market and longer-term shift to EVs. “Five key sectors including electronics, energy, chemicals, automotive, and services would act as strategic growth levers due to alignment with global trends and scalability, with the potential to address India’s unique challenges and advantages. “Rising income, a growing pool of skilled workers, and continuous improvements in infrastructure are some of the key factors that can fuel this growth,” it said. However, challenges remain.

A projected workforce shortfall of approximately 50 million individuals by 2030 highlights the need for enhanced STEM education and focused skill development programs across various sectors, the study said.

Also, placing more importance on backward integration and local manufacturing may help decrease India’s dependence on imports for essential components, it added.

Public-private collaboration in Al, green energy, and other critical sectors and enhancing R&D investment as a percentage of GDP could accelerate domestic innovation and reduce dependence on global supply chains, the report observed.

“India’s economic growth depends on strengthening infrastructure, bridging skill gaps, and fostering innovation through technology and global partnerships. By investing in digital and transport infrastructure, enhancing domestic manufacturing and driving collaborative R&D, we can position India as a leader in future technologies and global trade.

“A multi-pronged, tech-driven approach will be key to unlocking inclusive and sustainable growth,” nasscom Sr. Vice President Sangeeta Gupta said.