India’s economic landscape is unprecidently gloomy, with almost all the key contact-intensive sectors on the verge of collapse. The Indian economy — till recently the brightest star on the global growth firmament — has not been having its happiest moments. Geopolitical tensions with Pakistan are not helping. Consequently, the country’s equity market and startup ecosystem are facing a crisis, putting their long-term viability in question.
For the past few months, the Indian economy has been assailed by tragedies that rob it of its dynamic capacity for growth. New economic indicators point to a recession in two major industries – the extraction, particularly oil and gas, and commercial sectors – driving uncertainty among investors. Equity market is an essential component of India’s financial structure. It’s fallen short recently, as part of a broader trend of higher market and economic uncertainty. Investors remain spooked, and this nervousness is as clear as day when you look at the trading volumes and market valuations.
What is more, the Indian startup ecosystem, reputed for its vibrancy, too has taken a hit. With fewer investments available to pour into innovative new startups, many new ventures are finding it increasingly challenging to raise funding. Such a slowdown would kill off much-needed innovation and job creation, making already challenging economic times even more difficult.
Geopolitical factors are adding to these challenges. India is dealing with rising tensions along its border with Pakistan. This needless conflict distracts from and undermines our country’s essential domestic priorities for growth. These conflicts threaten not just national security but international investor confidence, aggravating already serious economic challenges.
Henny Sender, founder and managing partner of Apsara Advisory—a strategic consultancy for financial services companies—has been tracking these dangerous trends. Sender concludes by encouraging everyone to make these priorities a reality to open the door to a more resilient economy. She suggests that without targeted reforms and a focus on higher-skilled job creation, India may struggle to regain its previous momentum.
Most job opportunities in India currently cater to low-end roles, which include positions such as food delivery and basic service industry jobs. Though these jobs are certainly needed and attractive as immediate employment options, they do little to lay the foundation for long-term economic prosperity. The lack of opportunity for training and advancement is further underscored by the predominance of low-end job creation.