@DAVOS 2024 INDIA - INEVITABLE
| 3 | | 2 | Editor - Vinod Shenoy | Creative Director - Muhammad Jaan Faruqui Advertising & Sales International Media - Print & Events: srinivas.iyer@mediascope.co.in | sharmila.devnani@mediascope.co.in | joy.dutta@mediascope.co.in rachna.gulati@mediascope.co.in | saajid.nishat@mediascope.co.in | vinod.kumar@mediascope.co.in This magazine is printed and produced by Mediascope Representation India LLP. Opinions herein are the writer’s and do not necessarily reflect the opinions of Mediascope Representation India LLP. Editorial enquiries concerning the reproduction of articles, advertising and circulation should be addressed to: INDIA@DAVOS 2024, Mediascope Representation India LLP., 51, Doli Chamber, Arthur Bunder Road, Colaba, Mumbai - 400005. India. • Email: srinivas.iyer@mediascope.co.in • M: +91 9820132670. Material in this publication may not be reproduced, whether in part or in whole, without the consent of the publisher. INDIA@DAVOS 2024 is printed at Silverpoint Press Pvt. Ltd., A-403, TTC Industrial Area, Mahape, Navi Mumbai - 400709. CONT ENT S I N D I A @ D A V O S 2 0 2 4 04 | Exclusive Article: CII President 06 | Curtain Raiser: Davos 08 | Exclusive Article: CII DG 10 | Special Feature: Remittances to India 12 | Expert Opinion:TCS 14 | Viewpoint: Adani 18 | Cover Story: India Inevitable 22 | Consumer Economy: Middle Class Checks In 25 | Information Technology 2.0 26 | Banking: Kotak Private Bank 28 | Special Feature: Business Next 30 | Special Feature: NTPC 32 | Special Feature: Sameera Warehouster 34 | Special Feature: Greenko 36 | Interview: State Bank of India 38 | Special Feature: Govt. of Karnataka 40 | View Point: Essar 42 | Special Feature: GEP 44 | Special Feature: Jaquar 46 | Special Feature: Fractal 50 | Special Feature:Tech Mahindra 52 | Special Feature: Invest India 54 | Special Feature: SunTec 57 | CII Photo Gallery 18 22 25 32 36 46 50 54 KOTAK BANK
| 4 | has become the true reason why India is differentiated in the approach of the Government to its citizens and the connect between the businesses and the Government. At its core, lies the Digital Public Infrastructure (DPI), characterized by the Unified Payments Interface (UPI) services and the India Stack. These frameworks, comprising governmentbacked APIs, have birthed transformative platforms like Aadhaar, UPI, DigiLocker, CoWin and Open National Digital Commerce, revolutionizing online connectivity for over 900 million smartphone users across the country. This technology leap has catalyzed sectors such as e-commerce, EdTech, and MedTech, fundamentally enhancing and positively influencing lives on a profound scale. To bolster the pivotal drivers of growth and the backbone of the economy, the Ministry of Micro, Small & Medium Enterprises (MSMEs), the government has already launched credit schemes and other programs, acknowledging their crucial role in fostering economic development and job creation. India's stride in encouraging financial inclusion for farmers via AgriTech solutions, interventions fostering conducive industrial environments through schemes like Production Linked Incentives (PLI) and extensive infrastructure development, underscore the nation's commitment to sustainable growth. Simultaneously, India's renewable energy mission positions it as a front-runner in climate action, firmly on track to meet its commitments with an ambitious green hydrogen mission. India's dedication to sustainable development is further highlighted by its substantial advancements in alternative fuels. These initiatives further underscore India's commitment to combating pollution. Aiming to raise the share of natural gas in its energy mix to an ambitious 15 per cent by 2030, India is also actively embracing various alternative fuels and energy sources for mobility such as biofuels, electric vehicles and hydrogenpowered vehicles. The Government has already unveiled a roadmap for mandatory blending of compressed biogas in the transportation and domestic segments of the city gas distribution sector, solidifying its proactive stance towards cleaner energy solutions. Driven by a visionary ambition to transform into a $35 trillion developed economy by 2047, India strategically positions itself as a global powerhouse. The nation astutely acknowledges the shift towards regional stability, resilient supply chains and inclusive development, and the need for the Global growth to progress forward in an equitable manner so that the relevant opportunities are offered to all. The vibrant startup ecosystem in India serves as a testament to the nation's entrepreneurial spirit and potential. The proliferation of startups has not only fueled economic growth by wealth creation and employment generation but has also ushered in a wave of disruptive Driven by a visionary ambition to transform into a $35 trillion developed economy by 2047, India strategically positions itself as a global powerhouse. solutions. India's emergence as an innovation hub is further validated by its steady ascent on the Global Innovation Index, reflecting the nation's growing prowess in sectors such as artificial intelligence, industrial IoT, and robotics. Furthermore, India's economic strategies are underpinned by a multifaceted approach, encompassing fiscal reforms, infrastructure development, and initiatives aimed at fostering a conducive business environment. The nation's commitment to bolstering ease of doing business reflects its proactive stance in attracting investments and fostering industrial growth. Moreover, the substantial investments in infrastructure, particularly through the Gati Shakti program, are not only enhancing connectivity but also unlocking new investment avenues, while reducing the cost of doing business substantially. India's commitment to inclusive and sustainable growth, innovation and global engagement signifies its emergence as a powerhouse poised for comprehensive economic advancement. • Amidst the current global landscape, shrouded in uncertainty, primarily fueled by the escalating geopolitical tensions that threaten the stability of economies worldwide, which is further compounded by persistent inflationary pressures, India emerges as a beacon of optimism, maintaining a relatively stable economic trajectory that diverges from prevailing global trends. Positioned in a phase of dynamic evolution, the nation has undertaken substantive structural reforms across sectors, laying a robust foundation for comprehensive economic advancement. Hailed as the new growth engine of the global economy, India significantly contributes, approximately 15 per cent, to the overall growth dynamics. The nation's GDP growth projection of 6.5 to 7 per cent for the fiscal year 2024 underscores India's trajectory as one of the world's fastestdeveloping economies. Anchored by favorable demographic dynamics, technological adaptability, and an array of reform-driven policies, the New India not only presents a plethora of possibilities for mutual growth and development but also emerges as a harbinger of scalable solutions to address multifaceted global challenges. The nation’s accomplishments, such as the successful Chandrayaan (Indian Lunar Exploration Project), symbolize burgeoning scientific capabilities and place New India at the forefront. India's restructured Space Policy emphasizes increased private sector involvement, fostering knowledge transfer to invigorate space exploration endeavours. The Digital revolution in India is a testament to the nation's prowess in innovation and transformation. This Mr R Dinesh President, Confederation of Indian Industry (CII) India emerges as a beacon of optimism EXCLUSIVE ARTICLE | 5 |
• Artificial Intelligence as a driving force for the economy and society; • A long-term strategy for climate, nature and energy. India Inevitable For several reasons the India story segues well with this year’s theme at Davos. Through most of 2023 India has been the centre of global attention. Undoubtedly, its leadership of the G20 group of countries last year helped. It was however more in the news more because of the amazing resilience it demonstrated to withstand and then rebound from the unprecedented back-to-back shocks over the last three years. Even better it has emerged as one of the fastest growing countries in the world without allowing runaway inflation, giving rise to the slogan: India Inevitable. More importantly, its demonstrated ability to use technology to do public good at scale—a key theme at Davos this year—is drawing global eyeballs. India’s foundational identity, Aadhaar, enabled the country to evolve a digital public infrastructure (DPI)—a standard that was endorsed by the G20 summit meeting in New Delhi last September— to solve for poverty (by targeting benefits using the trinity of an individual’s bank account, mobile and Aadhaar and lift 415 million out of poverty), banking 430 million people in little over a decade, creating a world class interoperable payments platform (averaging 10 billion transactions a month) that is steadily acquiring a global footprint, and lay the foundations of an inclusive digital health system. At the same time, India has been able to rewrite its global narrative at the global high table by pivoting to becoming part of the solution without compromising its key values. Presumably, ‘New India’ will have as much to contribute to this year’s deliberations at Davos as it will seek to learn from it. • | 6 | CURTAIN RAISER This year’s World Economic Forum (WEF) takes place in exceptional circumstances. The cycle of shocks unleashed with the onset of the once in a century covid-19 pandemic, three years ago, continues. What started off as a health crisis, snowballed into a global economic crisis. A turn in geopolitics only complicated matters. At the same time, rapidly worsening climate change, rise of generative Artificial Intelligence (AI), and fragmentation of geoeconomics are triggering unprecedented structural change. In this era of heightened uncertainty and insecurity, trust has been the biggest casualty. The theme for the 54th meeting of the WEF therefore, is rightfully about Rebuilding Trust. This year’s dialogue will focus on building trust at three levels: Into the Future, Within Societies and Among Nations. Accordingly, the emphasis is on creating the much needed space for global dialogue—the biggest casualty of geopolitics—deepening existing partnerships, encouraging agile policy frameworks and the use of technology to create public good at scale. The Plan The key objective at the WEF this year is to focus on leadership that is required to guide countries and the world in this complex, constantly changing environment. Accordingly, this year’s programme will consist of well-structured and well-prepared workstreams relating four interconnected priorities: • Achieving security and cooperation in a fractured world; • Creating growth and jobs for a new era; scan here for www.greenkogroup.com WORLD'S LEADING ENERGY TRANSITION & DECARBONIZATION SOLUTIONS COMPANY Rebuilding Trust
| 8 | India’s engagement in the World Economic Forum’s annual gathering at Davos has played an instrumental role in shaping global economic conversations for decades. Over time, its growth trajectory, sustainability initiatives and innovative capacities have captivated the attention of global stakeholders. The Confederation of Indian Industry (CII) has played an integral role in this narrative, contributing valuable insights and experiences in India’s developmental journey to the global business community for over 35 years. In the year 2023, India’s G20 Presidency served as a significant milestone in its global leadership narrative. Throughout its tenure, India steered discussions and spearheaded initiatives among major world economies, aiming to address multifaceted global challenges. Prioritizing inclusive growth, sustainability and fostering digital public goods, India made substantial progress. Collaboration efforts, exemplified by institutions like the Global Biofuels Alliance and the India-Middle East-Europe Economic Corridor, underscored India’s commitment to international cooperation for shared progress. As the Secretariat of B20, the business engagement group of G20, CII assembled a diverse coalition of business leaders and experts. With approximately 1500 members from G20 and invitee countries, alongside numerous global stakeholders, this collaborative effort reached new heights. B20 India’s impact transcended formal discussions, encompassing over 110 policy advocacy and outreach initiatives that engaged more than 20,000 delegates. The meticulous efforts of B20’s Task Forces and Action Councils yielded actionable recommendations across World Economic Forum: Shaping global economies multiple themes. These encompassed financing for global economic recovery; inclusive GVCs for resilient global trade and investment; financial inclusion for economic empowerment; digital transformation; tech, innovation and R&D; future of work; skilling and mobility; energy, climate change & resource efficiency and ESG in business. Notably, B20 India established a dedicated action council on Africa, aiming to enhance human capital outcomes, bolster agricultural and industrial transformation, and fortify digital and physical infrastructure across the continent. These concerted endeavours culminated in groundbreaking ideas encapsulated in 54 recommendations and 172 policy enablers. Remarkably, nearly 80 per cent of these proposals have been considered and adopted by the G20. Achievements included comprehensive studies on accelerating services trade, deploying digital public infrastructure and promoting digital trust through standardized cybersecurity protocols. Additionally, the recommendations focused on addressing sustainability and climate change imperatives by advocating for net-zero transitions, standardized ESG reporting and harmonized international carbon markets. The G20 leaders’ declaration emphasized the pivotal role of private sector involvement in addressing global challenges. Many of the suggestions put forth by B20 found resonance in these discussions and official announcements. The inclusion of the African Union as a G20 member was a significant step toward representing the perspectives and needs of the Global South. India’s B20 presidency provided an opportune platform to showcase its growth narrative to the global Chandrajit Banerjee Director General, Confederation of Indian Industry (CII) EXCLUSIVE ARTICLE | 9 | business community. Driven by digital innovation, a burgeoning startup ecosystem and strategic governmental interventions, India prioritizes inclusive growth, digital innovation, climate resilience and equitable global health access. Landmark initiatives like the Digital Public Infrastructure (DPI) and robust support for a dynamic startup culture underscore India’s commitment to shaping a future defined by innovation and progress. Looking forward, India aims to leverage emerging technologies, prioritize research and development and embrace structural reforms to harness unprecedented opportunities driven by its market scale and young demographic profile. Initiatives such as increased R&D spending, enhanced research-oriented educational institutions and business-friendly policies to attract investments are propelling India toward greater economic influence, unlocking avenues for sustained growth and prosperity. India maintains its position as the fastest-growing large economy and is projected by the IMF to become the world’s third-largest economy by 2027, contributing approximately 15% to global growth. The CII estimates India’s economy to grow between 6.5 to 6.7% in the current fiscal year. Coordinated efforts of the Government and the Reserve Bank of India have helped control retail inflation within the central bank’s tolerance band, amidst globally elevated inflation levels. This accelerated growth, supported by domestic consumption, investment, and government spending, coupled with rising business confidence, is steering the nation closer to its goal of becoming a developed economy by 2047. International collaborations will play a pivotal role in India’s economic transformation. With trade agreements signed with 13 countries and ongoing FTA negotiations with key economies like the UK, EU, and the Gulf Cooperation Council (GCC), India’s progressive Foreign Direct Investment (FDI) policies continue to attract global investors across diverse sectors. India has notably improved its Ease of Doing Business, consistently reducing compliance burdens, integrating technology into government-industry interfaces, and simplifying legal provisions to attract investments and bolster business confidence. The Government’s focus on promoting the digital economy, fintech, technology-enabled development, energy transition and climate action is evident through targeted policies in logistics, infrastructure, digital accessibility, welfare measures and more. Emerging industry sectors in India, including digital transformation, advanced manufacturing, smart infrastructure and electric vehicles, are creating numerous opportunities. Sustainable development stands as a top priority for the Government, with ambitious targets like achieving a non-fossil energy capacity of 500 GW by 2030 and net zero carbon emissions by 2070. India already ranks fourth globally in renewable energy installed capacity, particularly in wind and solar power. Efforts are underway to develop green hydrogen as a viable energy source for transportation and hard-to-abate sectors. Given the significant global challenges and shifts, consensus-building has become increasingly urgent. Davos 2024 will undertake the essential task of addressing transformational forces and nurturing collective agency under the theme of ‘Building Trust’. Recognizing this need for consensus-building, CII has established a task force dedicated to fostering trust within the Indian Industry. CII aims to present the Indian perspective at Davos 2024 and actively contribute to meaningful global discussions and collaborations. •
| 10 | SPECIAL FEATURE Remittances to India: Up, Up and Away India remained the largest recipient of remittances, with an estimated $125 billion in 2023. A surge in the country’s high-skilled migrants and lower transactions costs through digitalisation have facilitated higher inflows. The Inflows How India Stacks Up Non-resident Deposits: A favoured route Year Remittances ($ billion) 2014 70.39 2015 68.91 2016 62.74 2017 68.97 2018 78.79 2019 83.33 2020 83.15 2021 89.38 2022 111.22 2023 125.00 2024* 135.00 SOURCE: World Bank • Note: *Forecast SOURCE: World Bank–KNOMAD staff; World Development Indicators; IMF Balance of Payments Statistics. • Note: e = estimate ($ billion, 2023e) SOURCE: Reserve Bank of India. Data are for the month of September of each year. 5 Figure 1.2 Top Recipients of Remittances among Low- and Middle-Income Countries, 2023 Source: World Bank–KNOMAD staff; World Development Indicators; IMF Balance of Payments Statistics. Note: GDP = gross domestic product; e = estimate. The United States has continued to be the largest source of remittances, followed by Saudi Arabia. As a share of GDP, however, Saudi Arabia has a significantly larger volume of outward remittances than the United States. Top remittance source countries include several countries of the Gulf Cooperation Council (GCC). However, data on outward remittances tend to overstate the size of the flows in countries that are offshore financial centers. 1.2 Moderate Growth of Remittances in 2023 Remittance flows to LMICs are estimated to reach $669 billion in 2023, exceeding the forecast given in Migration and Development Brief 38 (published in June 2023; World Bank/KNOMAD 2023), helped by a higher-thanexpected increase in flows to the South Asia and Latin America regions. The growth in remittances is estimated to have fallen to 3.8 percent in 2023, following a 7.7 percent gain in 2022, as resilient labor markets in advanced economies (especially the United States) and GCC countries continue to support remittance flows to LMICs. The robust recovery of job markets in the high-income countries of the Organisation for Economic Co-operation and Development (OECD) following the onset of the COVID-19 pandemic has been the key driver of remittances, particularly as employment growth during the recovery was more rapid for immigrants than for the native born (figure 1.3). The relative strength in remittances to the Latin America region compared to other regions can be explained by strong growth in the US labor market, the region’s main source of remittances (see figure 1.3 and section on Latin America and the Caribbean in the regional appendix to this brief). 125 67 50 40 24 24 23 21 20 16 ($billion, 2023e) 48 41 32 28 27 27 26 26 23 21 (Percentage of GDP, 2023e) Figure 3.2 A Surge in Nonresident Deposits in India, 1997–2023 Source: Reserve Bank of India. Data are for the month of September of each year. Nonresident deposit schemes are easy to implement as there is no requirement to register such programs in foreign jurisdictions. Because of that, however, such schemes cannot be actively marketed overseas. Anecdotally, countries rely on international commercial banks to mobilize nonresident deposits, but the commission paid to the banks can be exorbitant. Also, such deposits are short-term liabilities. Unlike remittances, they can be volatile and highly sensitive to international interest rate movements. As such, nonresident deposits are not appropriate tools for financing long-term development projects. 143 0 20 40 60 80 100 120 140 160 $ billion
| 12 | | 13 | EXPERT OPINION Nothing demonstrates Artificial Intelligence’s impact on our public consciousness better than leading dictionary publishers Collins, naming the abbreviation of the term - “AI” as their words of the year. The need to regulate AI been as hotly debated as its benefits and its impact on the economy and on jobs. The World Economic Forum’s Future of Jobs Report 2023 found that nearly three-quarters of companies surveyed plan to adopt AI, with 50% expecting it to lead to job growth. In the book Bridgital Nation, featured by WEF here, our Chairman Mr. N. Chandrasekaran had predicted that AI could add 30 million jobs by 2025, and provide a major impetus to economic growth. Not surprisingly, the impact of AI on the economy will be a major topic at the forthcoming Annual Meeting of the WEF in Davos. And it is easy to see why. We’re at the start of a transformative decade in which generative AI is already reshaping work, life, and business. It will unlock benefits in healthcare, education and climate change, as well as having a substantial economic impact, with some projections suggesting the addition of an economy equivalent to India and China by 2030. Yet, despite the intense focus on AI, we are missing something fundamental. Public attention has largely been on how productivity can be increased with accelerating outputs. But the real potential lies in the decision-making processes that precede that. Here, AI can augment what humans are capable of, taking them from average to great rather than rendering them obsolete. Novices can be made as proficient as experts, by harnessing the tacit knowledge present in organizations, using AI. Boosting productivity is just the side show. Transforming good work into great work will be real value of Artificial Intelligence AI’s evolution Before we look into this, let’s define what we mean by AI. Its evolution has been rapid and can be delineated by its expanding capabilities. Initially, AI focused on recognition tasks, like identifying objects in images. Its next iteration involved reasoning, analysing what is happening, why it is happening, what the likely outcomes are, what we should do about it, and decisionmaking based on that understanding. The most transformative shift happened with the advent of generative or operative capabilities, exemplified by Large Language Models (LLMs) like GPT, LaMBDA and LLaMA. These models leverage predictions made during the reasoning stage and can make decisions and propose actions. LLMs go beyond the information fed to them and extrapolate, resulting in non-deterministic responses to the same input. These LLMs have the power to extract insights from unstructured content and when combined with enterprise-specific models, they can create a knowledge superstructure, enhancing decision speed, effectiveness, and customer experiences. Augmenting, not replacing humans It’s clear that the most effective use of generative AI will be in augmenting human creativity, rather than in replacing humans. AI won’t replace jobs, but make people better at them, in part by the democratisation of knowledge. This will allow for jobs to be elevated by AI, levelling existing knowledge gaps and increasing global access to information. Indeed, the World Economic Forum predicts that AI will be a net job creator between now and 2027. While there is an onus on businesses to support their staff in re-and-upskilling in line with these developments, the benefits are clear for all to see and increased efficiency and thus often higher output is a welcome side effect. The need to reskill people needs to be our first priority towards realizing this opportunity. At TCS we have trained over 100,000 people on Generative AI in the past year, and I am heartened to see similar efforts across the industry, which are essential in building up an AI-ready workforce. A new, AI-first Architecture for enterprises In today’s knowledge economy, enterprises generate value through knowledge work, which involves decisions and actions taken by individuals or groups. Traditional techniques like machine learning and data analysis have been used to extract information from structured data, but unstructured content and data repositories have led to a significant amount of tacit knowledge. This reliance on tacit knowledge makes decisions difficult to explain and causes variability in decision outputs, outcomes, and customer experiences. GenAI or large language models have the potential to extract insights from this unstructured content. Foundational models, such as GPT, LIama, and open-source models, are world-wise, understanding common knowledge. However, when combined with enterprise-wise models and traditional AI/ML techniques, a knowledge superstructure can be created within an enterprise, increasing the speed and effectiveness of decisions and actions. This can improve customer experiences, productivity, and talent utilization. The greater benefit of these technologies is in digitizing an enterprise’s knowledge and reducing reliance on tacit knowledge in decisions and actions. This requires creating large numbers of enterprise fine-tuned purposive models or agents for each activity, which will be further augmented by these knowledge superstructures. AI should be viewed as a business redefinition exercise, involving various parts of the business, such as legal, security, data, compliance, and tech teams, to identify the highest value activities that can be transformed through a knowledge superstructure. Enterprises will need to invest in a four-tier architecture, powered by hundreds or thousands of purposebuilt models optimized for cost, quality, security, and privacy. This complex undertaking offers significant opportunities in reducing reliance on tacit knowledge, delivering elite quality value, and reducing variance in output quality. However, a sophisticated and well-thought-out strategy is required to drive this transformation within an enterprise. Taking decision-making from average to great Ultimately, generative AI offers an enterprise-wide opportunity to improve decision-making processes and overall efficiency. This integration digitises enterprise knowledge, reducing reliance on tacit knowledge and boosting productivity and talent utilisation. And it’s here where the current focus of public debate is misplaced, focusing almost exclusively on “action”, rather than on the potential to digitise an enterprise’s knowledge and reduce reliance on tacit knowledge in decisions and actions. Simply put, the real value of AI and Machine Learning lies in the step before output, in improving decision-making. Why? Because it can help us overcome the gap between average and great outputs and unlock higher-quality outputs more consistently. It allows us to democratise knowledge. This could help improve outcomes in many areas – just think of enabling doctors to diagnose and treat patients more consistently despite differences in experience and time constraints. If we harness generative AI in the right way – and focus on how it can augment our decision-making and creativity – we can unlock a powerful knowledge superstructure, enhance decision speed and effectiveness, and supercharge customer experiences. Turning average or even good work to great. That is the true opportunity ahead. • The Four-Tier Architecture for AI, conceived by Tata Consultancy Services 2023 will be remembered as the year generative artificial intelligence became mainstream. By K. Krithivasan CEO and MD, Tata Consultancy Services
| 14 | | 1 5 | VIEWPOINT: ADANI The commitment of the Adani Portfolio, India’s largest integrated infrastructure developer, to achieve net zero emissions is significant in addressing climate change and promoting sustainable development. Accordingly, its five portfolio companies—Adani Green Energy, Adani Energy Solutions, Adani Ports & SEZ, ACC and Ambuja Cements— will go net zero by 2050 or earlier. They will invest $100 billion over the next decade to achieving these targets. Through proactive adoption of renewable energy, the businesses are not only shrinking their carbon footprint but also fostering growth of clean energy alternatives. Adani Green Energy, the renewable energy arm of the Portfolio and India’s largest renewable energy player, raised three rounds of construction facility amounting to $3 billion. Adani Energy Solutions, India’s largest private sector electricity transmission and distribution company raised more than $1 billion as a green loan, and its subsidiary Adani Electricity Mumbai issued sustainability linked bonds for $300 million. By transitioning from conventional combustion engines to electric vehicles and machinery, they can effectively curtail emissions linked to transportation and industrial processes. Not only does it mitigate air pollution but also reduces reliance on fossil fuels. Adopting biofuels represents another highly innovative approach. These fuels can generate cleaner energy with significantly lower carbon emissions. It reduces greenhouse gas emissions and fosters the adoption of sustainable agricultural practices, while creating economic opportunities in the biofuel industry. Adani's impressive stride in utility scale renewables and fully integrated manufacturing, coupled with end-toend engineering, procurement, and construction (EPC) capability, positions it uniquely to drive down costs and facilitate the adoption of green hydrogen. To produce green hydrogen through electrolysis, renewable sources such as solar and wind power are key. The Portfolio’s extensive experience in developing and operating renewable power projects lends itself to this strategy to scale green hydrogen. With sharp focus on steering business with excellence, major thrust is on digitization of operation via the Energy Network Operation Centre (ENOC)–one of the largest industrial clouds and among the most efficient monitoring platforms in the country, wholly owned by the Adani family under Adani Infrastructre Management Services. Using ENOC, integrating business operations with data analytics, machine learning adoption, drone usage for monitoring project progress and digital asset mapping, and geospatial technologies for surveys has enabled the Adani utility portfolio run world-class assets with best-in-class operational efficiency. Adani’s unwavering commitment to sustainability and cutting-edge solutions makes it an ideal partner for organizations seeking to adopt green hydrogen. With Adani's proven track record and deep understanding of renewable technologies, the Portfolio is ready to spearhead the transition towards a greener future. A Green Business Strategy The Adani Portfolio underwrites an integrated approach to sustainable infrastructure. Adani Energy Solutions set up a 400kv/220kv transmission line–Kharghar Vikhroli Transmission Limited–under a 35-year concession for 74 circuit kilometers with 1,500 MVA transformation capacity, enabling green power flow of 1,000MW into the city of Mumbai. It was funded by a green loan from international banks and commercialized in December 2023. At the same time, Adani Green’s 700 MW Solar Wind Hybrid project in Rajasthan supplied power to Mumbai, under a 25-year PPA with Adani Electricity. This PPA will reduce cost of power for Mumbai consumers by more than 50%. It helped Adani Electricity achieve Mumbai’s target of procuring 30% renewable power by FY2023. Financing for the 700MW solar wind hybrid plant was underwritten by more than 15 international banks and became operational in March 2023. The Adani Portfolio prioritizes oversight committees to monitor sustainability targets. All listed entities have a Board-level Corporate Responsibility Committee (CRC) comprising of independent directors to deliver on ESG commitments. Accordingly, the key performance indicators for the $300 million sustainability-linked bonds issued by Adani Electricity Mumbai are independently reviewed by third parties (Vigeo Eiris, Deloitte, BSI Group) and disclosed. Failure to achieve a target entails a one-time coupon stepup of 15 basis points per annum. The advancements made by the Adani Portfolio companies are as follows: Adani Energy Solutions Adani Electricity Mumbai, a subsidiary of Adani Energy Solutions, increased its renewable energy share in the overall mix to an impressive 38.3%, making Mumbai a leading procurer of renewable energy. Adani Portfolio Chairman, Gautam Adani says Adani Electricity is on course to provide Mumbai with 60% renewable electricity by 2027. Adani Energy Solutions received an impressive score of 86% from CSRHub, a leading ESG global performance rating agency—better than the Electric and Gas Utilities industry average of over 900 global companies. Adani Green Energy Adani Green Energy is among the top 10 renewable power production companies in the world as per Sustainalytics. In the first half of FY2023, the renewable power company achieved zero waste to landfill and turned net water positive at all sites of 200 MW or more. It is ranked as the world's second-largest solar PV developer by Mercom Capital Group. With a total capacity exceeding 20 GW, Adani Green has solidified its position in the global renewable energy sector. Adani Ports & SEZ Adani Ports currently operates 15 ports and integrated logistics business and is well on track to turn net zero by 2040. In the first half of FY2024, it achieved a 15% share of renewables in the total energy mix, reduced the energy intensity by 46%, energy emissions by 48% and water consumption intensity by 59%. Adani Enterprises Adani New Industries is building three giga-factories to develop 10 GW polysilicon to module manufacturing capacity with supporting ancillaries, 5 GW wind turbines and 5 GW electrolysers as part of its low-cost integrated green hydrogen project. In FY2024, Adani New Industries produced India’s first solar wafer and the highest capacity onshore wind turbine generator of 5.2 MW. • Left-right: Green Hydrogen (Representative Image); Energy Network Operation Centre; Adani Green Energy Solar plant, Titpur, Karnataka Mumbai Skyline Left-right: Mundra Port; Mundra Solar PV Ltd facility, Mundra, Gujarat; Adani Portfolio leads the way in Sustainability Consistent with commitment of $100 billion investment over the next decade to green energy transition. Five portfolio companies to become net zero by 2050 or earlier As world leaders gather for COP28, Adani Electricity stands out with its green initiatives. We are on course to provide 60% renewable electricity to Mumbai by 2027, setting a global record for a major city. Currently, over 38% of our supply is green. This Diwali, we achieved a landmark by fueling Mumbai entirely with 100% renewable energy, demonstrating our dedication to a sustainable future. Gautam Adani | Chairman, Adani Group
| 18 | COVER STORY It all began with a Morgan Stanley analyst report calling it ‘India’s Decade’. A summation of the economic promise combined with the country’s unique flourish with digital public goods to achieve public good at scale. Thereafter, the floodgates opened as it were. Not just investment banks, even corporates, countries and multilateral institutions like the International Monetary Fund and the World Bank, started talking up India as the next lighthouse of the world economy. Everyone is betting on the country’s potential. This is no mean achievement. Especially if you consider the fact that even stronger economies were unable to cope with the polycrisis moment when back-to-back crises struck the world economy. This unprecedented moment began with the once in a century pandemic. Thereafter, the breakout of conflict between Russia and Ukraine—a regional war challenge that has now spread to the Middle East—worsened global supply chain disruptions; something that accelerated in the aftermath of the West initiating decoupling from China. Together with the decision of the United States Federal Reserve to ratchet up interest rates, this triggered a worldwide inflation spiral. This cost-of-living challenge has spared few countries. India’s remarkable resilience against global shocks together with determined efforts to initiate long overdue structural reforms—especially the alacrity it exhibited in the last decade in overcoming the legacy deficits in basics like access to banking, housing, electricity, roads, cooking gas and so on—and a calibrated policy response that balanced lives and livelihood caught global attention. More recently this has acquired a moniker: India Inevitable. India nudged this process further after it undertook a fundamental pivot in its approach to multilateral negotiations. It shed its zero-sum approach, where it saw As India pivots to a new growth path, its policy gambles are getting bolder and increasing in frequency, ambition, and success. INDIA Inevitable | 19 | itself as part of the problem. Instead, a self-confident India now casts itself as part of the solution. Consequently, it is now unafraid to embrace the risks that go with decisions enabling global good. Recent examples are its bold commitments to fight climate change or inking the raft of Free Trade Agreements (FTAs)--while FTAs with the United Arab Emirates and Australia are inked, deals with United Kingdom and United States are being negotiated. A few years ago this kinds of a bold strategic pivot would have been inconceivable. The successful conclusion of the G20 summit meeting in New Delhi in September is a tacit recognition of how India is harvesting the gains of reinventing itself on the global stage—lending more heft to the growing perception about it as a global entity willing to shoulder its responsibilities. India@2047 Internally, the Niti Aayog, the erstwhile Planning Commission which has been recast as the union government’s think tank, is readying the blueprint for the country to break out of its status as an underdeveloped economy and to evolve into a $30 trillion economy by 2047. A sneak peek shared with the media reveals that with population stabilizing around 1.5 billion, this would entail an equally dramatic growth in per capita income. If all goes to plan, then the country’s per capita income is forecast to grow from $2,400 at present to $17,590 in 2047—a staggering seven-fold growth. Underlying this desire to grow the economy so rapidly is a strategic intent: A belief that a strong economy translates into a country that is strong, both militarily and diplomatically. The logic is easy to fathom. The history of battles is replete with examples of vulnerable economies suffering defeat. Worse, in the context of the ongoing trend of regional wars, it is apparent that no conflict is short. Instead, it is a steady battle of attrition that could go on for years, wherein the country with the weaker economy finally caves. Given the recent turn in geopolitics, de-risking is a precondition to ensure national security. The face-off between the United States and China over the manufacture of silicon chips and efforts to shore up mineral security are sufficient pointers to the new threat matrix.
| 20 | At the same time there is a tacit recognition that no single country will acquire all capabilities—implying that there will be some level of dependence on others. This is the genesis of the idea of “friend-shoring” of supply chains. Hence, while India must grow its economy numerically, it will also have to strengthen its foundations. An economy that will be more diversified with a strong industrial base—including defence production capability—ensure energy security, especially through the diversification of the energy mix with lesser emphasis on hydrocarbons. India will also have to ensure that neither an individual nor a region in the country is left behind. At present, regional growth is skewed with the eastern regions lagging the western states. Social and regional stability is a prerequisite to ensure sustainable growth. Finally, India will need a reliable and vast infrastructure that connects the country both internally and externally. The good news is that several building blocks like developing infrastructure, including rural connectivity, on mission mode, an industrial policy defined by production linked incentive schemes or PLIs to localise production and creation of defence clusters have already been seeded. In addition, India enjoys a demographic tailwind, with a median age of its 1.3 billion population just 28 years and a massive 68% working population. Its rapidly growing middleclass—projected to grow to a staggering 1 billion in 2047—will also help expand the domestic consumer economy, reaffirming its potential as a global investment destination. However, pulling off such an audacious ask to achieve the potential that the rest of the world sees in it, will require India to undertake a fundamental mindset reset among all stakeholders—government, bureaucracy, corporates, and citizens. This won’t be easy. India’s recent record shows that neither is this impossible. • Underlying this desire to grow the economy so rapidly is a strategic intent: A belief that a strong economy translates into a country that is strong, both militarily and diplomatically. www.greenkogroup.com 10 GWh* by 2024 50 GWh* by 2026 100+ GWh* by 2028 * can be used more than one cycle per day Intelligent Renewable Energy Cloud Storage Platform IREP Pinnapuram, Kurnool, India
| 22 | | 23 | CONSUMER ECONOMY India’s consumer economy is poised to get a booster dose as it grows in size. MIDDLE CLASS CHECKS IN For any economy consumers are key to sustainable growth. And within this cohort, the middle class, equipped with surplus incomes, are a critical stakeholder. On both counts, India has tended to come up short for most of the first seven decades since it attained Independence. The good news is that change is in the air. Anecdotally, we hear how the consumption story is spreading beyond India’s metros to Tier-1, Tier-2 and even Tier-3 towns. Now new studies confirm this trend. In fact, the numbers are staggering. According to PRICE (People’s Research on the Indian Consumer Economy) report released earlier this year, India’s middle class would nearly double to 715 million by 2030-31. It doesn’t stop there. The report goes on to argue that the middle class would grow to a massive one billion by 2047—nearly three times the present population of the United States. Impressive no doubt, but it is not very surprising and largely an outcome of the ongoing dramatic socio-economic makeover, including banking 430 million people and pulling scores out of poverty. According to the 2022 report on global poverty by the United Nations Development Programme (UNDP), the designated UN body to lead the fight against poverty across the world, India successfully lifted 415 million out of poverty in 16 years ended 2021. In several ways the declining trends in poverty and the projections of a rapid growth in the middle class define a new narrative for India: It is a case of the economy trading up, slowly but steadily. This is also apparent in growing aspirations, the rapid growth in frictionless payments using Unified Payments Interface (UPI), e-commerce and accessing utilities online. The poor—the largest cohort for the last 75 years— escaping poverty, will gradually ascend the social ladder to join the middle class—which in any case has got many layers and is not a homogenous entity. The flip side of this is that the middle class—the force multiplier for any consumer economy--is emerging as the biggest demographic segment. A structural makeover of this magnitude is rare and has huge attendant implications—especially for the polity of the country and its consumer economy. The only other example that comes to mind is China. Exactly why countries and foreign companies are queueing up to invest in India. They are betting on a future when the middle class would grow several times over and generate unprecedented purchasing power and expand the consumer economy like never before. Morgan Stanley, the global financial services firm, acknowledged this formally in their analyst report when they argued that the next decade was India’s. Differing speeds The larger story of the middle class however masks the fact that this large cohort is not homogenous. In fact, it is a story of differing speeds. The latest Indus Valley Report (2023) published by Bloom Ventures, a venture capitalist firm, captures it best when it unpacked India’s demographic story based on per capita incomes. Broadly, it defined India-1 of 120 million people ($12,000 per capita income); India-2 of 100 million people ($3,000 per capita income); and, India-3, the largest cohort, of 1.2 billion people ($1,500 per capita income). The report adds that India-1 includes 25 million people with a per capita income of a very impressive $35,000— comparable to any developed country. Clearly, it is the story of a country operating at different speeds and needs. As of now, the India’s consumer story is still based on the power of few: It is firing on one cylinder, India-1. The good news though is that this scenario is poised for change.
New India What lends hope are the policy tweaks, like the introduction of Goods and Services Tax (inspiring the idea of ‘One Nation, One Tax’), digitalisation using the Digital Public Infrastructure to reduce if not eliminate, friction in the economy. Further, the resulting disintermediation and formalisation is also reducing corruption, which in turn further prunes the diseconomies faced by Indian enterprises. This improving ecosystem is in turn fostering the growth of startups—who now account for a very impressive tenth of the country’s workforce. Some of these startups are aggregating the economic power of small and medium enterprises (SMEs). For example Zetwerk (industrial products, apparel), nexprt (home decor), Groyyo (apparel) and FASHiNZA (apparel) are manufacturing tech startups that are aggregating demand and then servicing them by creating cloud factories for SMEs to manufacture these products. Not only is it good business SMEs, but it is also drawing these enterprises into the mainstream. | 24 | | 25 | In Crore (Source: Income Tax Department) A subtext of this new narrative is the growing formalization of the Indian economy. This is visible in the filings of Income Tax Returns (ITRs). The tax base—reflecting the surge in the country’s gross domestic product—has almost doubled from the level of 3.8 crore ITRs in 2013-14. It shows a visible structural shift upwards since 2016-17. This increase in the direct tax base is not an isolated instance. It plays out in the case of indirect taxes too. Ever since the launch of the Goods and Services Tax (GST) on 1 July 2017—the marquee tax reform that for the first time economically unified the country—the number of taxpayers has grown steadily. It has more than doubled from 60 lakh to 141 lakh on 1 July 2023. If India’s evolving tax system is providing an impetus to formalisation, then its digital economy is not only greasing the economy, but is also accelerating formalisation. This in turn expands stakeholders in the Indian economy. From being invisible they are transforming into economic entities. In other words, there are fewer Indians who are outside looking in, and hence remain invested in growing the Indian economy. A win-win situation. • If India’s evolving tax system is providing an impetus to formalisation, then its digital economy is not only greasing the economy, but is also accelerating formalisation IT 2.0 The Second Coming for Indian IT Indian IT is once again making headlines, driving the export of value added software services and bolstering India’s role in advancing generative AI. Addressing the second Kashi Tamil Sangamam at the Namo Ghat in Varanasi last month, Prime Minister Narendra Modi used a home grown generative Artificial Intelligence (AI) product, Bhashini, to translate his speech delivered in Hindi into Tamil. It was the biggest leg up for India’s national language database platform that uses generative AI services to bridge the Internet divide in the country by enabling access, both in text and voice, in local languages. It showcased India’s growing prowess in generative AI applications. Interestingly, addressing a conference in early December hosted by MoneyControl, Andrew Yan-Tak NG, co-founder, Coursera, maintained that India was emerging as a key player in generative AI—which at present is shaking up the global order. According to Stanford University AI Index India led the world in AI skill penetration. It is no coincidence then that service exports are beginning to see an unprecedented upward shift. The export of services three years ago averaged under $100 billion. In the last few years it is trending at around $200300 billion (see graphic). Recently, the Services Export Promotion Council (SEPC), set up under the aegis of the union commerce ministry, said this would top a record $400 billion in 2023-24. Previously India’s competitive edge lay in the IT outsourcing model—pioneered by the likes of TCS and Infosys. While IT services continue to dominate, there is a visible increase in other categories like engineering, research and development (R&D) and business services. The growing trend in the commoditisation of services, especially with the rise of cloud, has only hastened this process. Especially since it is blurring the distinction between service and merchandise exports. One such instance is the surge in Global Capability Centres (GCCs)—delivery centres created by MNCs in India. According to analysts, 40 percent of the global GCCs are located in India. Initially GCCs served as providers of support functions for the parent company. More recently, they have moved up the ladder, to R&D and business development This trend will only grow as GCCs are now a key part of the global supply chain. In the final analysis it is clear that new technology trends—the growth of generative AI—and an ongoing geopolitical reset has opened opportunities for India’s IT services sector, albeit in a new avatar. • SOURCE: Ministry of Commerce YEAR $ Billion 2019-20 213.19 2020-21 206.09 2021-22 254.35 2022-23 325.44 2023-24* 220.66 *Apr-Nov Services Exports from India
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