Namaste and good morning. I'm so privileged to be leading a discussion on the future of India with those that have been deeply engaged with the India story and continue to drive it. Ashwini, Minister of Information and Broadcasting, Minister of Railways, Minister of Electronics and Information. He truly wears many hats at the same time, modernizing India's railways, shaping the country's information and broadcasting, and also working on its digital ambitions. Gita Gopinath, Gregory and Ana Kofi Professor of Economics at Harvard. Gita is someone who has shaped global economic thinking on growth and risk from her leadership at the IMF to now at Harvard. Sunil Bharti Mittal, Chairman of Bharti Enterprises. Sunil Bharti Mittal is an entrepreneur who has helped define modern Indian enterprise. Bharti Airtel is a global communication giant and is responsible for India's mobile revolution. Mr. Herrera, CEO and President of IKEA Group, one of the world's most recognizable brands. I'm sure all of us here have one piece of IKEA at some point in our life. As a CEO of the IKEA Group, you're looking at a deeper engagement in India. Welcome all of you. At a time when much of the global economy is grappling with uncertainty, India stands out as a rare bright spot. On Monday, in its World Economic Outlook report, IMF revised upwards its estimate for India's economic growth for 2026 from 6% to 7.3%. The fund projected global growth at 3.3% while describing India as a key growth engine for the world. In fact, many describe India as having a Goldilocks phase: strong growth and moderate inflation. Many projections suggest India could overtake Japan and Germany over the next few years and move into the global top three. But momentum is not destiny. The real question is about timing, execution, and choices, and what does India need to do to convert this moment of opportunity into economic transformation? I'm going to start with you, Minister. When you hear this framing, can India become the third largest economy? Do you feel we're asking the wrong question? Should it really be when will India get there? And if so, how will we get there? What are the two things that will help us and what are the two things that could halt us?
India will become the third largest economy in the coming few years itself. It's not a question of will it become, it's certainly a certainty that will happen. It's a question of within the next few years we will definitely become the third largest economy. What's working very well is the last decade of very transformational change which has happened in our country and it's a very well thought through, well-defined, and very focused execution. It's built on four pillars. The pillar of public investment in physical, digital, and social infrastructure, making sure that the entire society grows along with the growth of the country. So very inclusive growth. Third, the pillar of manufacturing and innovation. Fourth, the pillar of simplification. All this combined with the base of technology that we have put, we can very clearly say that India is going to grow with 6 to 8% real growth and a moderate 2 to 4% inflation and a nominal growth of 10 to 13% with 95% confidence interval in the next 5 years. So that's the kind of growth journey which is there we can say with a lot of confidence. And what's working very well is that the entire society is seeing the benefit of it. When we look at 540 million new bank accounts opened, when we see 130 million toilets getting constructed, when we see 800 million people getting rationed every month, month after month, that shows that the security of the poorest comes as a priority for our government, for Prime Minister Modi ji, and that has helped us bring 250 million people out of poverty. So these two factors, a very well thought through growth path, very inclusive growth, are going to be very good for our country. What's really a matter of concern on our minds is the global debt which is there in the rich world. The huge amount of debt, the mountains of debt in the rich world, how that debt will unravel, what will be the impact. We saw yesterday in Japan, there was a run on the bonds. So that kind of thing if it happens on a very large scale, what will be the impact on our country is a matter of concern. Otherwise everything else is in a very good shape that we will become the third largest economy in the coming years.
Okay. So we'll talk a little bit later about what are the things that you are doing to insulate us, but now on to you, Gita. Do you agree with that? Is India's ambition to break into the top three reality? What's your view?
Without a doubt, India will become the third largest economy of the world. It's a matter of a few years unless something catastrophic happens. If you just look at the math in terms of India's growth rate relative to Germany and Japan, it would be very hard to see how India would not get there. And based on current projections, India gets there by 2028. It could be even sooner than that depending upon how the revision of the GDP numbers happens at the start of this year. I guess relatively soon what happens with the rebasing. So that is not the challenge for India. The challenge for India is not about becoming the third largest economy in the world. The challenge for India is about raising per capita incomes to higher levels. And indeed, I agree with the Minister that substantial reforms have been undertaken. The physical infrastructure buildout is impressive. The digital infrastructure buildout is impressive. What was done with the goods and services tax, including the simplification recently, extremely helpful. So to keep the momentum going and to keep raising per capita income and getting to the 2047 goal of Viksit Bharat, I think that's the challenge. And that will require keeping up with the steady pace of reforms to get there. But again, a lot of positive developments in India and very important is the macro stability that you have in the country, not just with growth where it is but also with inflation being at the low single-digit numbers. That is a good spot for India.
So you have said earlier that the two things that could hold us back, one is land acquisition is a little bit messy, deregulation, and you have said we've not really used our demographic dividend to its fullest. So what are the things that you think we can do to fix some of those?
Yeah, I think a little bit messy is probably an understatement. It is a tremendous challenge in India to acquire land, to have clean land titles, and that is a constraint on growth. It's a constraint on manufacturing. There are states in India that are experimenting with techniques that other states can also adopt. I think Andhra Pradesh is doing a good job in finding very creative ways of helping with selling of land, shifting land from being agriculture to commercial land. Land titling again, pushing on that is important. Judicial reforms I think are absolutely critical. That is a very important bottleneck for growth in India and it's been there. I think people have seen it as a long-standing challenge but we're not seeing many changes on that front. In terms of the labor force, you're right. We've been talking about the demographic dividend in India for a long time. But if you look at the contribution of labor to growth in India since the 1980s, only about 30% of India's growth has come from labor. So it is a fairly capital-intensive production structure that India has because of the rules and regulations that exist and the complications of hiring labor. Now it is a very positive step in terms of implementing the labor laws that were passed by parliament a few years ago. I think that's great. The states need to take that and go ahead. Raising the limit on the number of workers above which you face higher regulation from 100 to 300 is good. Though, if you want to be a part of the big global supply chain, you're going to have to be way more than 300 in terms of the size of the labor force that you have. So, pushing on that front is important. Labor market flexibility is critical. On top of that is the skilling of human capital. I think that is a very important part of the solution too. It's not just about the fact that firms aren't creating jobs. There is a mismatch between what jobs can be created and the skill of the labor force in India. So pushing on that front in terms of the level of education and human capital and skilling is super critical.
Minister, would you like to come in on any of the comments that Gita has made? Anything you'd like to add?
We follow a model of cooperative federalism where the central government and the state governments, we work together to bring out many of the reforms. And some of the reforms which are happening in Maharashtra, in Andhra Pradesh, in Odisha, many of these reforms are now becoming the template for other states to follow. And the labor reforms implementation is a major, major, major step. GST simplification, labor reforms, opening the nuclear energy sector to private sector, and reforms in practically every sector. We have two groups of ministers which are working on half the ministries in one group, half the ministries in the other group where we are going down to the procedural reforms, to legal reforms, to every possible reform that we can have. And I'll request all the participants present here, in case you feel there is any particular point which is hampering your growth in India, do come out. We are here to listen to your problems and solve them. We are here to be the catalyst for your growth in India.
Excellent. Mr. Mittal, you are a pioneer of India's digital revolution. Much of its growth would not have happened without you. You helped build the networks on which we are now growing. What do you think is the next thing we can do to turbocharge our growth and what do you think is leashing us?
Well, I think India is generally in a great spot. I mean, you already heard that it's a matter of numbers, mathematics. We will get there to be number three. And if I put a spiritual metaphor around it, I would say it's written in the stars. The question is 6-7 trillion dollars for 1.5 or 1.6 billion people doesn't stack up. So, we will get to number three, but we need to get to 25-30 trillion. And we can quibble about the year in which we'll get there. But we have to get there and we will get there. What do we need? My tribe, the business community, needs an enabling environment, needs a committed government, needs a stable situation in the country. All that is available. Now one factor that is coming to challenge our growth that we are currently on is massive competition that has occurred in the world today. US was a huge market for China to grow itself, and they used 20-30 years of that wonderful moment to build their factories, to build their manufacturing bases, go into deep tech, earn a tremendous amount of money to shore up the economy. That opportunity is not available for India. So we will have to find our own ways and means. Thankfully we have a huge market. India, the continent of consumers, young people consuming more and more. We will be signing hopefully the EU trade deal very soon. UK is done. Australia is done. New Zealand is done. UAE is done. Many more in the pipeline, but the big one with the US hopefully also gets done soon. We heard from Secretary Lutnick this morning. America must bring everything back to manufacturing in America. That's a change. We need to deal with that new shift in the global trading norms that we'll have to deal with. Give us more backing from the government, give us more freedom. We have a Prime Minister who understands the power of business. He uses the industry and industry players to scale up the country, provide more employment. The PLI scheme that has come out. I never thought during my lifetime India will be a manufacturing destination for electronics or telecom equipment. All that has changed in the last 5, 7, 8 years. Just in the last 5-7-8 years, massive amount of exports of Apple phones and many other products are happening now. I remain very, very confident that the energy that I see in India, and now I work in Europe, I work in France, I work in UK, and I can tell you we will continue to grow at the rapid clip of 6-7-8%, hopefully in some years even higher, whereas the world will be settling at half a percent, 1%, or minus in certain years. We have a good future for us. What can derail us is only the competitive intensity of the world play now that we need to deal with, and that really lies in the hands of the able government how they deal with the trade deals.
Okay. Thank you. Mr. Herrera, you've seen India through many, many years and right now with IKEA on the ground, from a global CEO's perspective, how does the world view India's growth story?
First, I have to say that I always make a disclaimer when talking about India. I am emotionally biased with India because we lived in the family, my wife and the two children, for six years, and so I call myself an Indian ambassador in the business community. So unpaid as well. This is the best disclaimer made. No, of course, India, you have to be in India. There is no option because it's a big market, it's the young population. It's also a democracy, it's an English-speaking country. But also at the same time, India has had, is having, and will have the possibility to leapfrog from agriculture to the most developed AI much faster than any other country. So we see, of course, very positive in that sense.
So Minister, you said in the first question I asked you that one of the pillars is simplification, which is basically deregulation. And many times, whoever you speak to, that is one of the concern areas. So can you talk a little bit more about what are you doing to make ease of business happen in India?
Absolutely. In the last 10 years, 1,600 laws, old antiquated statutes have been removed from the statute book. Can you give a similar example anywhere in the world? 1,600 laws have been removed. 35,000 compliances have been removed. A big exercise is right now going to reshape the legal structure tuned to modern times because many of the laws were written in a time when the government and the political setup of that period, I'm saying from 1950 to 1990, that was a period when the governments were basically very inward-looking, they were very protectionist, they were not looking at the energy of our people. They were trying to control that energy. So many of those laws are being rewritten now. So that's a major exercise which is going on. Second, many of the procedural things are getting changed. Mr. Mittal has witnessed, to get a telecom tower permit it used to take 270 days. Now it takes 7 days. To get a railway terminal connected to the railway network, it used to take 6 years. Now it takes just about two and a half months. So that is the kind of simplification, procedural as well as legal, is happening in the country. Our entire criminal justice system which was of 1800s vintage, so that has now totally been transformed into a new structure. The telecom act was of 1854 vintage, that has been replaced by a brand new 2023 act. So practically every sector we are trying to bring in a totally new legal framework or totally new procedural framework built on the technology stack that we have.
Okay. So Gita, I don't know whether you know but there's a Rajiv Gauba committee which is looking at deregulation. I want to ask you, is making another committee to get rid of bureaucratic red tape the best way forward?
Well, I assume that this is not just a committee for its own sake, but the hope is that it's going to come up with actual actionable plans. Yes, absolutely. I mean, India needs a lot more deregulation. It is still, in terms of ease of doing business, it is still a challenging place to do business. I'd love to hear from you in terms of what challenges you face. So taking out more and more of the archaic rules that have held back business is absolutely critical. But then all other aspects of India will also have to continue in terms of the reforms will have to continue. The ones we talked about on land and labor. One of the areas I wanted to point out which we usually don't talk about when you're talking about business development is I want to talk about pollution. Pollution is a challenge in India. And if you look at the impact of pollution on the Indian economy, it is far more consequential than any impact of any tariffs that have been put on India so far. If you look at the annual cost to India's GDP of the level of pollution that you have, and it's not just the effect on economic activity, but it's also the loss in lives. I mean the numbers are really large. Based on a World Bank study that was done, I think it was published in 2022, about 1.7 million lives are lost every year in India because of pollution. That's 18% of the deaths in India. I think even from any international investor's perspective who's thinking of coming in and putting up a shop in India, if you have to live there and the environment is not of the kind that you feel that okay this is going to be consequential for your health, it holds you back. And obviously not to say about all the Indians that are living in this kind of pollution. So addressing that on a war footing is critical. I mean this has to be a mission, a top mission for India along with deregulation. We're putting it right along with deregulation for India. Yes.
So Mr. Mittal, you work in other countries, you just mentioned in Europe and you've been working in the US as well. What are the lessons that India can take from there for ease of doing business? You know, what are the things that we can adopt?
Well, I can say certainly nothing from France or UK. It's much harder. Much, much harder. Oh my god. It's much harder. And they also have the additional burden of the Brussels bureaucracy which they have to deal with. So just multiple layers there. I would say US is a good model where business is really highly encouraged and the ease of doing business I would say to a good level. And of course there are fine examples in Singapore and UAE etc. But I would echo the Honorable Minister's point of view here. India has come a long way. I mean I'm a product of, I started in '76 so I have seen this plethora of books, handbooks, manuals, standing outside in DGTD, CCIE, hundreds of departments getting one license to get something into the country. All that is gone. 1991-92 was one big wave and I would say in the last 10 years a lot has been done. Can more be done? Yes, we as business community will keep on asking for more. Transfer more faith onto us, have faith, we will do the right things, we'll be more compliant. Indian companies have much better governance standards today than they were in the 90s and early 2000s. I think this government is engaged. I hope and really I'm confident that this committee is set up for a real reason because the Prime Minister recognizes there is still much more to be done in ease of doing business and I remain very hopeful something good will come out of this.
Okay. So I'm adding on to the question Gita kind of asked you about doing business in India. Is it easier to do business in India or in China? And what would be your advice to a global CEO coming into India at this moment in time?
