2024 could be the year that India brings together decades of latent economic promise, of demanding a seat at the top table, of being an easier and more predictable place to do business. The Vision 2047 document, expected to be formally unveiled this year, will lay out a path to elevate India’s economy from a gross domestic product of USD 3.4 trillion to USD 30 trillion by 2047, the centenary of India’s independence.  

There is broad consensus within the Indian Government that this growth must come sustainably and inclusively, the aim being that by 2047 India’s estimated population of 1.5 billion citizens will live in a developed economy that can serve as a roadmap for other countries.

Businesses that align with government investment programmes – bringing higher levels of investment into the country and creating manufacturing jobs – must plan effectively to navigate the risks and challenges that will accompany this growth. Control Risks’ Top Risks for 2024 can help companies make sense of their exposure and prospects in this large high-growth, high-risk economy.

The great realignment: acting globally, surviving locally 

Geopolitical competition and localisation will shape global business in 2024 as companies and countries reorient and realign. Geopolitical competition is forcing capital to take sides, while localisation is forcing companies to change how they do business. Both megatrends pose strategic risks and opportunities. This is no truer than in India.

India was an early adopter of trade and investment restrictions on China, long before Washington got a taste for it. There still has been no parallel to India’s banning last February of over 200 of the most popular China-based apps. Other tactics, like India’s Production Linked Incentives (PLI) schemes, aim to build resilience against geopolitical disagreements by reducing imports.

India is primarily driving economic sovereignty through regulation, a prominent feature in the multiple free trade agreements it is negotiating with individual countries as well as regional trade blocs. Strategic rivalries are playing out through friend-sourcing trade, preferential access or denial of technology, and selective access to markets and resources.

Surviving locally in India will require companies to understand and ally with India’s benefits-based decision-making on geopolitical and operational risk issues. Every manufacturing company should have an indigenisation programme – not just to tap into the growing consumer class in India, but also to stay aligned with local politics, social norms, and sensitivities. Mapping key stakeholders’ specific interests will help companies understand how they can best position themselves with key political and bureaucratic decision makers in India.

Uncertainty paralysis: US politics and China’s economy 

2024 could be a year of relative calm between the US and China. The US will focus inward on its own presidential politics, while China manages its economic downshift.

India will likely use this opportunity to play a bigger role in global geopolitics, positioning itself as the peacemaker of last resort while leveraging inward investment to accelerate it becoming a top three global economy by the end of the decade. India looks set for a multi-decade run of 6%+ per annum GDP growth between now and 2047 – a period akin to China’s expansion between 2000 and 2019. This long-term focus is where companies need to keep their attention, not on the next few years or on incremental value-added comparisons with China. Companies that invest patient capital in India will position themselves to participate in its projected 10-fold growth in GDP.

A likely third term for Mr. Modi in 2024 would reaffirm his legacy and provide a mandate for greater reform and incentive creation – as well as for tougher regulations on data, energy transition, centre/state balance of power, and critical national infrastructure management. If re-elected, Modi would likely seek to solidify the geopolitical positioning gains from his G20 Presidency, and this would likely take the form of outreach to Africa, funding and technology transfer to the Global South, and a drive towards a revised global order based on population need and development objectives.

Economic growth has now become India's most significant way of projecting geopolitical, diplomatic, and military might. Companies have a massive opportunity here if they can help enable it.

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Climate disruption: the global threat multiplier 

We expect 2024 to be the hottest year on record, impacting everything from supply chains to the spread of disease. Support from governments has never been weaker. Regulation is flawed and inconsistent, international cooperation virtually non-existent, and financial backing for transition weak. To top it all off, geopolitical competition is complicating access to the critical minerals vital for transition. 

India’s over-populated, arable land; sensitive mountain and river ecosystems; and long, fragile coastline makes a for a risk profile that rebuffs even the most comprehensive operational strategies. Even today, over 60% of Indian farmers are dependent on rains, with 55% of India's net sown area rain-dependent and growing 34 of the country's 40-odd major crops. 

The current administration is aware of the need for policy-based incentives, changes in behaviour, and regulatory reform. They are equally conscious of the need for continuity and consistent implementation to maintain India's position as a desirable place to invest and grow. Currently, much of the burden of infrastructure and technology transformation needed for energy transition in India rests on the shoulders of international funders and businesses. 

Yet as one of the largest potential contributors to global growth this century, India is poised to be the first large developing economy to plot a sustainable trajectory toward becoming a developed nation. Despite its continued dependence on coal, India is rapidly transitioning to renewables (wind, solar, nuclear, hydro) and is making early investments in green and blue hydrogen. India has committed to go net-zero by 2070 and is implementing green investments through a range of policy initiatives, tax incentives and international technology transfers. All of this suggests that India understands the need to grow responsibly. It is still early days – and for India the devil is always in the implementation – but investors are beginning to see intent become action.  

India is also aiming to leverage its critical minerals. The government is scaling up efforts to secure supplies of over 30 critical and rare minerals key to the manufacturing of everyday electronics, cutting edge tech, and electric vehicles.  

Trust deficit: digital integrity frays  

In 2024, companies will be challenged by a paradigm shift in the integrity and resilience of emerging technologies. Threats will arise from AI-enabled cyber threats, reduced levels of human intervention in the digital ecosystem, and the growing complexity of regulatory pressures worldwide.  

India's IT consulting services companies found success delivering digital transformation programmes to creaking 20th-century enterprise technology platforms. These platforms are now facing a decline in demand, as well as significant challenges around safeguarding the integrity of their data and technology.  

AI poses its own set of threats for India. The Digital Personal Data Protection act – six years and multiple rewrites in the making – does not address the threats posed by malicious AI, while use of fake news and deep fake content will ramp up as India heads into an election year. Autonomous systems enabled by AI will only compound threats to critical infrastructure, which has been recently targeted by threat actors.   

The government will need to carefully manage and regulate India’s tech and digital infrastructure. India Stack is a sprawling, government-authorised application programming interface (API) that allows third parties (private, public, non-governmental, and social enterprises) to build apps with access to government IDs, payment networks, and data that deliver specific services to citizens and consumers. India Stack and the digital applications that sit on top of it have become a critical national asset. For instance, through the widely available Aadhar card authentication, UPI payment, and 5G enabled smartphone access systems, everything from welfare payments and farm loans to direct to consumer offerings are now delivered online, offering citizens convenient, corruption-free services. Maintaining the integrity and resilience of these data systems will be key to business continuity and national sovereignty in India going forward. 

Risk management overload: crisis everywhere 

The danger of overload in risk management will hit a new high in 2024. More wars, more coups, more extreme weather events and more instability are putting pressure on risk management teams just as they are facing challenges sustaining or growing their budgets. 

India will certainly suffer, to some degree, from this feedback loop. Economic pressure drives climate transition. Conflict triggers cyber and digital threat escalation. Regulation encourages graft.  

But political stability, geopolitical alignment and greater operational predictability in India are all factors helping to increase investor confidence. Tech is playing a role here as well. The reliability and scalability of  the technology platforms built on India Stack have enabled the Indian government to successfully manage the wealth of data generated by the digital activity of what is currently the largest population in the world.  

Managing risk overload requires a holistic and dynamic approach, one that leverages technology and data to source intelligence as well as monitor, manage and mitigate threats. Risk must be integrated into company culture and aligned with values and the corporate risk appetite, as well as driven by ownership and accountability.  

Companies that can successfully integrate a tech-driven, multi-disciplinary approach in India – a high-growth market with a multi-faceted and interdependent risk profile – will likely be able to do so anywhere. 

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