New York, April 21 – India must generate at least eight million jobs every year for the next 10 to 12 years and expand its manufacturing sector’s contribution to GDP if it hopes to realize its ambition of becoming a developed nation by 2047, according to the Indian government’s Chief Economic Advisor, V. Anantha Nageswaran.
Speaking at the Columbia India Summit 2025, organized by the Deepak and Neera Raj Centre on Indian Economic Policies at Columbia University’s School of International and Public Affairs, Nageswaran highlighted the challenging road ahead. He noted that unlike the relatively favorable global conditions from the 1990s to the early 2010s, the current international environment is marked by increased instability and uncertainty.
“India cannot control the global setting, but within these constraints, we must still aim to generate around eight million jobs annually and work towards boosting manufacturing output—especially in light of China’s dominance in this area post-pandemic,” he said.
He pointed out that technologies such as artificial intelligence and automation pose new hurdles. Unlike in previous decades, India now has to manage economic development while facing the risk of technology displacing jobs, particularly in entry-level roles and the IT-enabled services sector.
“While it’s crucial to equip people for an AI-driven future, we must also carefully balance technology adoption with labor-oriented strategies. These are not decisions to be made by technologists alone—they need to be part of public policy,” he added.
Nageswaran emphasized that integrating Indian industries into global supply chains and nurturing a healthy Micro, Small, and Medium Enterprises (MSME) sector are essential. He noted that countries with strong manufacturing sectors have always had a robust MSME backbone.
To support this transformation, either the investment rate must increase, or India must find ways to optimize the returns from current investments, especially as international capital flows are likely to be disrupted by ongoing global conflicts.
“Trade with other countries will remain important. Enhancing competitiveness in exports can also drive innovation and productivity at home. However, we must be realistic—exports won’t contribute to growth as much as they did in the 2000s when they made up 40% of India’s GDP growth,” Nageswaran said.
He added that the current contribution has dropped to about 20% and may decline further in the coming years, making it all the more important to improve domestic systems, such as research and development, product quality, infrastructure, and logistics.
While India has managed to maintain an average growth rate of over 8% in the past three years following the pandemic, Nageswaran acknowledged that continuing this pace will be difficult. However, sustaining a growth rate of 6.5%—and occasionally pushing it beyond 7% with reforms such as deregulation—would be a realistic and effective path forward.
The United Nations Conference on Trade and Development (UNCTAD) recently projected India’s growth at 6.5% for 2025, crediting public expenditure and easing monetary policy as key drivers—even as the global economy shows signs of a slowdown due to rising trade tensions and uncertainty.
The Columbia India Summit brought together academics, economists, policy analysts, and students to discuss India’s economic future and the role of innovation and trade. Concluding his remarks, Nageswaran stated, “The challenges are significant, but with the right policy focus and clearly defined priorities—like the push for deregulation—we can retain our growth momentum in an unpredictable world.”(PTI)
