18 growth arenas McKinsey says could fuel India's global rise by 2040

India has 18 high-impact arenas that could drive its next major economic leap, potentially contributing 30% of incremental Gross Domestic Product (GDP) by 2040, according to McKinsey & Company. Divided into nine global and nine national sectors, these areas span cutting-edge technologies and essential domestic capabilities. Global-facing opportunities include electric vehicles (EV) and batteries, semiconductors, e-commerce, cybersecurity, cloud services, artificial intelligence (AI), robotics, nuclear fission, and space. Notably, India’s EV demand is projected to rise 15-fold by 2040, its AI sector could generate Rs. 1,21,422 crore (US$ 14 billion) by 2030, and the country aims to achieve 100 gigawatts (GW) of nuclear capacity by 2047. The space sector is also gaining momentum, targeting 8% of the global market by 2033, with over 200 startups and Rs. 3,903 crore (US$ 450 million) in investments between 2021 to 2024.
On the national front, nine arenas target self-reliance and domestic transformation: medical devices, biopharma, auto components, renewables with storage, aerospace and defence, biomass-based chemicals (Bio-to-X), urban construction, travel and tourism, and industrial electronics. Sectors such as medical devices and biopharma show robust growth potential, while renewables aim for 500 GW capacity supported by battery storage. The auto component sector has flipped a Rs. 21,683 crore (US$ 2.5 billion) trade deficit into a Rs. 2,602 crore (US$ 300 million) surplus. According to McKinsey, a tailored approach is essential, as each arena demands differentiated strategies in policy, capital, and talent based on its maturity and market orientation. With strategic action now, India can fast-track its domestic transformation and solidify global leadership in key sectors.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.