International Monetary Fund Executive Director Dr. Krishnamurthy Subramanian said India’s economic growth and diverse landscape has become a hot spot for diaspora entrepreneurs looking to expand their businesses.
“I would love to inform the Indian diaspora that the startup ecosystem has developed tremendously over the last eight years. For instance, the growth rate of startups since 2014 has been in the double digits,” Subramanian said in an exclusive interview with The NRI Nation on the sidelines of the India conference at Harvard at Harvard Kennedy School in Cambridge, MA.
India’s startup sector is ushering in a new era of innovation and dynamism. According to the latest economic survey, it has surged astronomically, with over 14,000 startups emerging in 2021-22 compared to just 733 five years ago.
According to Subramanian, India has a vast market and a staggering amount of daily digital transactions. This data potential provides a powerful opportunity for analytics, AI, and machine learning applications.
“India has a large market. If you add the number of digital transactions in a day in the U.S., Europe, and China and multiply that by two, India’s digital transactions in a day are more than that. That many transactions in one country in a day generate tremendous amounts of data. So there’s significant potential for analytics, data analytics, artificial intelligence, machine learning, and endless possibilities,” he said.
Subramanian advocates for the potential of Skill India and Startup India campaigns to improve business prospects. He believes such government initiatives will be a strong foundation for Indian diaspora entrepreneurs eager to launch their firms in India. “Indian expats can avail the benefits of these government programs,” he said.
When asked how the diaspora can contribute to the Indian economy Subramanian emphasized the importance of diaspora contribution to India’s economy, stressing that Indians in foreign lands can help channel resources and wealth back to India. Indian diaspora should “participate and give back to the Indian economy” and be an “ambassador of India by representing the country in their small towns, cities, or communities.”
“Motherland India has played an important role in enabling the overseas Indians, providing them the capability to come to this land of opportunity [USA]. So I believe there is also a moral duty for the Indian diaspora to give back by participating in the Indian economy,” he said.
India has become a global leader in overseas remittances, shattering the $100 billion milestone this year. India’s Finance Minister Nirmala Sitharaman recently announced that foreign money transfers to India had grown by 12% — setting an unprecedented record as the first country to touch such heights of financial inflows from abroad.
Subramanian attributed the increased remittances to the solid economic state of India. “I think the Indian economy being in good shape is part of the reason why remittances have increased,” he said
With remote working technologies at their disposal and creative ideas in abundance, Subramanian argues that diaspora entrepreneurs can now contribute to India’s future through innovative projects launched while abroad.
With India’s economic growth soaring, Subramanian, the Former Chief Economic Advisor of the Government of India, believes that welfare and progress can further be achieved with the help of JAM trinity — Jan Dhan, Aadhar, and mobile. Over the last eight years pushing for technology-enabled governance has ensured sweeping reforms in how social welfare benefits are delivered to their intended beneficiaries. “For instance, bank accounts of more than 450 million Indians are linked to the JAM pipeline. So digital identity and mobile connectivity have helped ensure that welfare programs and their benefits reach the intended beneficiaries,” he added.
Despite the present global difficulties, Subramanian’s optimistic outlook regarding India’s future suggests that its proactive policies may bring a more robust economy. “While the global economy is struggling to grow at a rate of 1.5%, the Indian economy will grow at 7% this year. While tracking the Indian economy, I do not recall another period where India has been such a positive outlier in both growth and inflation,” he says.