International brokerage Bernstein has identified structural risks that could hinder India’s growth over the next decade. In a letter to Prime Minister Narendra Modi, managing director Venugopal Garre warned that India “risks under-delivering on its potential” if key issues remain unresolved.
The report highlights India’s lag in physical infrastructure, innovation capacity, and readiness for new technologies. It emphasizes the agriculture sector’s burden, with 42-45% of the population employed but contributing only 15-16% to GDP. Bernstein calls for increased investment in irrigation and a shift from subsidies to income-based support.
Concerns also extend to energy, where inconsistent electricity supply and significant losses in distribution companies are noted. The brokerage warns that India could become a “passive consumer” in the AI economy without developing domestic expertise.
Manufacturing, while showing momentum, still accounts for only 16-17% of GDP. Bernstein urges support for innovative industries and a reevaluation of transport priorities. It also cautions against rising welfare spending potentially crowding out productive capital expenditure.
Finally, Bernstein stresses the need for improved public service delivery and a broader tax base to sustain growth. The brokerage concludes that India’s gradual reform approach may lead to missed opportunities, urging decisive action.
