A recent report by McKinsey & Co. says the sector’s “economic potential” is growing at a rate of 9% per annum.
This growth is driven by a growing number of technology firms that have emerged from India’s nascent startup ecosystem.
The McKinsey report, entitled, “India’s Business Development Strategy: A Path to Prosperity?” found that “a growing number” of startups are looking to establish their presence in India.
It also noted that the number of startups in India is growing faster than in the US, China and South Africa.
As a result, it found that India’s GDP growth is set to “continue to lag” the rest of the world for the next 15 years.
“A large chunk of this growth is due to a rapid expansion in the number and size of startups and the number, size and scope of their businesses,” McKinsey said.
Its report said the Indian startup ecosystem has “shown remarkable resilience over the past few years”.
The report cited India’s high rate of startup startups and its “significant entrepreneurial spirit”.
“Despite the current financial crisis, India’s startup ecosystem is still relatively strong,” it said.
“There are many innovative and innovative companies that have established themselves in India and are actively looking to enter the Indian market.”
In the next 10 years, India will likely become a key player in the global startup ecosystem.
“The data from McKinsey’s report was shared with the government and a few major business groups, including the National Institute of Technology (NIT) and the World Economic Forum (WEF).
According to the McKinsey research, India has the fastest-growing startup ecosystem among emerging economies, but it also has the lowest GDP growth.
More than half of India is still unable to access funding, McKinsey says.
In terms of revenue, India is estimated to generate more than $300 billion in revenue annually.
Kunal Gupta, the managing director of McKinsey India, said: “This report makes clear that India is a leader in this space and we believe the market is ripe for the picking.
But we are also clear that there are still a lot of challenges to overcome and India’s future is going to be driven by its ability to deliver on its promise.
“Kunwar Raman, chairman of the NIT, said the McKinsell report “underscores the potential of this nascent market to be a key driver of growth in the Indian economy.
“”While we continue to work with our counterparts in the region, we are determined to ensure that India achieves a sustainable growth rate,” he said.