There’s a pall of gloom over the world as 2023 nears. The last 11 months have been about Russia’s bloody invasion of Ukraine, a looming global recession and Covid-19 that’s stubbornly resisting all efforts to eradicate it. On the India-China borders, eyeball-to-eyeball stand-offs have lately erupted into ugly brawls.

Let’s reach into the well-thumbed book of cliches to proclaim it’s an ill-wind that blows no-one any good. For starters, the high-tensions have been a boon for India’s nascent drone industry, which is flying high with the Indian armed forces emerging as the biggest buyers. The industry is making everything from surveillance drones to powerful packhorse drones that can carry up to 40-kg loads ranging from supplies to ammunition. The military’s “procurement of drones is happening in fast-track mode,” Drone Federation of India president Smit Shah says.

Return to earth to the flagship software services industry which was booming but whose outlook has become more uncertain. The forecasted worldwide economic slowdown will leave international companies with less money and mean weaker sales for India’s software giants. But here again for India, there’s a silver lining to the dark clouds. Eastern Europe was emerging as a software services challenger but with worries about the Ukraine conflict spreading, it’s no longer such a hot destination so India’s back to being a first-choice destination for price-conscious customers.

Turn to China, and once again the cards could be in India’s favour. China’s zero-Covid policy hit production and tarnished its reputation for reliable service. Now, with the zero-Covid policy abruptly lifted, more production disruptions seem likely with the virus rampaging through the population. Coupled with President Xi’s abrupt pivot from “economic growth at all cost” to “income redistribution,” all this could it make rumbunctious India look like a not-so-bad option.

For the drone industry, whatever happens economically, rapid growth is definitely on the cards with demand not only from the military but the police and agriculture. They’re also being used to oversee road construction and to track stocks in the mining sector. One company, aptly named Droneacharya, just held a 262-times oversubscribed IPO. Shah reckons 3,000-5,000 drones are already in the skies, not counting the countless drones used for marriages and the entertainment sector. Some users buy the drones, but others buy drone services and drone manufacturers fly them. “You don’t buy the drone. You buy the output,” Shah says

In the software segment, Pareekh Consulting chief Pareekh Jain says “everyone’s expecting a (US and European) recession.” Still, he says, medium-term, a “recession could work well for Indian industry because as companies seek to save costs, they’ll outsource more,” though contracts aimed at cost-cutting “usually offer lower margins that impact share prices.” Right now, Indian companies are eschewing such deals. “Nobody’s panicking yet,” he says.

There are other bright spots. The oil sector is raking in profits by buying discounted Russian oil, processing it and exporting it — oil-product exports have soared 70 per cent this fiscal year. In early December, oil companies were buying a record 1.6 million barrels per day. The West hopes its Russian oil price cap will put the squeeze on Moscow and enable Indian and Chinese to negotiate steeper discounts. Our consumer goods shipments to Russia are also on the upswing, thanks to Western sanctions.

Realty space

In the real-estate sector, more data centres and warehouses are expected to be built in 2023, though there’ll likely be a lull in the corporate-office segment as firms figure out space needs with more adopting work-from-home and hybrid-working models. Instead of having one big office, some companies have opted to set up four-or-five smaller offices in the same city to be closer to employees and clients. Also, the post-Covid move to India’s second cities looks almost certain to continue.

On the economic front, of course India won’t be immune from what could be a brutal global slowdown (though inflation may be peaking). But we’re still seen growing in the 4.8-5.9 per cent range in 2023, handily beating the forecast 1.8-per-cent global expansion, thanks to robust tax collections, higher capacity utilisation amid accelerating demand and government and corporate capital spending at all-time highs.

Still, in the world outside India, despite severe military setbacks, there’s no sign the Russians are ready to end fighting and there’s concern about the conflict broadening.

On the pandemic front, there are fears that with China’s huge numbers, new threatening variants could emerge. In short, the world will still be a grim place in 2023.

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