Indian middle class will drive internal consumption: Adani

Adani Group Chairman Gautam Adani said on Wednesday the Indian middle class is going to insulate the economy from downswings and drive “unmatched rate of internal consumption” in the next three decades.

Stating that the country’s population will be 160 crore by 2050, he said one in every three of the world's middle class consumer will be Indian. This will insulate India from downturns and drive an unmatched rate of internal consumption. No nation has ever created such a massive middle class. “Just the retail segment by itself will be worth $10 trillion,” he said.

Delivering the keynote address at the The Indus Entrepreneuurs (TiE) Global Summit here, Adani said the country has tremendous opportunities globally in the next few decades.

There will be challenges that will require healthy debates, as should be the case in a democracy. “The macroeconomic factors favour our country. The global GDP is pegged at $85 trillion. Of this, India’s contribution is $2.8 trillion. When the global GDP reaches $170-180 in 2050, the Indian GDP will be at $28 trillion, contributing over 15 per cent to the global economy,” he said.

“This requires structural reforms, which are getting in place and these reforms lay the foundation for accelerating our national growth,” he added. “By 2050, India would have created several of its own trillion-dollar value companies.”

“There will be a periods of slowdown that every large economy goes through. There will be difficult challenges for India to overcome but the scale of the opportunity that awaits India is huge,” he said.

Cost of energy

Stating that there is a correlation between energy economics and growth of nations, he said the marginal cost of electricity will continue to drop sharply as the renewable energy boom accelerates. “India will be the least expensive producer of renewable energy,” he said.

“As sources of renewable energy will always be free, there is no limit to how many electrons a power producer pull out from a square inch of silicon,” he said.

“We are very strongly positioned to take advantage of two structural global changes that are expected to happen. The pandemic has shown that even hyper efficient supply chains are hyper fragile. Supply chains will evolve to support individual markets,” he said.

“The acceleration in digital technology to manage operations remotely means there will be a structural shift between global locations where people need to be and locations where operations need to be executed. The pandemic has taught us that conventional need for proximity may be irrelevant,” he said.