India’s vision for 2026: Leading the way in a decisive year of change

Who has written this article? NK Minda, Chairman, UNO Minda.There has been a fundamental change in the global economic scenario in the last few years. The world order shaped by two to three decades of deep globalization – characterized by free trade, integrated supply chains and global sourcing – has given rise to a more fragmented and protectionist environment. Rising geopolitical tensions, regional conflicts and strategic competition have forced large economies to impose tariffs, non-tariff barriers and export controls, especially on critical raw materials such as semiconductors, rare earths, energy inputs and advanced technologies. These developments have disrupted global supply chains, increasing costs and increasing instability for businesses around the world.

Its impact is visible in global growth numbers. According to multilateral estimates, world GDP growth has slowed to about 3%, much lower than the average of 3.8–4% in the decade before 2010. Advanced economies are growing very slowly – around 1-1.5%. In this challenging global backdrop, India’s economic performance has been remarkably resilient. Despite global headwinds, India has emerged as the fastest growing major economy with a projected 7%+ growth in FY2026. Strong domestic consumption, sustained government capital expenditure—now over ₹11 trillion and 3.4% of GDP—and structural reforms have supported this momentum. India today contributes about 16% to global growth, underscoring its growing importance in the world economy.However, while India has performed well, we must acknowledge that our ambitions must be higher. To achieve long-term sustained growth compared to China’s high-growth decade between 2003 and 2013, when it grew consistently at 9-11% annually for more than a decade, India needs to accelerate manufacturing, deepen industrial capabilities and significantly expand its share in global value chains. Manufacturing currently contributes about 17-18% to India’s GDP, compared to 25-30% during China’s peak growth years. This gap highlights the urgency of localisation, self-reliant India and building resilient domestic supply chains. Building local ecosystems for critical components, electronics, energy systems and advanced materials is the most effective response to global instability.The automotive sector exemplifies India’s growth potential when policy alignment and market demands converge. Measures such as personal income tax rationalization, GST reforms and relatively supportive interest rate environment have boosted consumer sentiment. As a result, India has emerged as the third largest automobile market globally, with annual vehicle sales exceeding 25 million units.Yet, from a structural perspective, India’s automotive opportunity is still very nascent. Car ownership in India is around 44 cars per 1,000 people, compared to 300+ cars per 1,000 people in developed economies and even 150-200 cars in many emerging markets. This huge gap highlights huge scope for long-term growth with rising incomes, accelerating urbanization and expanding mobility aspirations. It is this structural low penetration that assures sustained demand growth for the automotive sector over the next decade and beyond.At the same time, the nature of the auto industry is also fundamentally changing. Consumers today demand advanced security, digital interfaces, connectivity and technology-rich features. Electronics now account for 35-40% of vehicle value, up from less than 20% a decade ago. ADAS, connected platforms, advanced lighting, power electronics, and software-defined architectures are becoming mainstream. The EV transition is further accelerating this shift, with EV penetration expected to increase from 6-7% today to 15-20% across all segments by 2030.Looking ahead, the growth momentum in the automotive sector is expected to continue in the next financial year and beyond. Decades later, we are witnessing a phase where almost all major OEMs are expanding capabilities. Investments in EVs, new platforms and advanced technologies will continue to be strong drivers of growth and localization.Another important dimension of India’s future competitiveness is artificial intelligence. While India has strong digital talent and a vibrant startup ecosystem, we currently lag behind the US and China, both of which are investing billions of dollars annually in AI infrastructure, foundational models and compute capacity. AI will be a decisive force multiplier in manufacturing, mobility, logistics, healthcare and governance. India must move rapidly to build AI capabilities through investments in computing infrastructure, data ecosystem, skills and industry-based use cases. Catching up is not optional; This is essential to sustain productivity-based growth.I am optimistic about India’s growth path in FY27 and beyond. Government policy will continue to be an important enabler. In the upcoming Union Budget, continued focus on infrastructure, manufacturing incentives, R&D support, EV ecosystem development, MSME integration and technology-based skills can significantly enhance India’s competitiveness. An intensified policy emphasis on AI adoption and domestic capacity building will future-proof the economy.The next phase of India’s growth will be based on five key reform pillars: accelerating manufacturing and industrial competitiveness for Make in India; Supporting MSME growth, enabling technology and AI-based innovation; strengthening infrastructure and logistics; advancing sustainability and energy transition; and deepening the ease of doing business through regulatory reforms. Together, these pillars provide a comprehensive framework for building a resilient and future-ready economy.The world may be fragmenting, but this moment presents a historic opportunity for India. With the right mix of policy, industry action and technological ambition, India can emerge not only as a fast-growing economy, but as a globally competitive, innovation-driven economic superpower.Disclaimer: The views and opinions expressed in this article are solely those of the original author and do not represent the Times Group or any of its employees.