Mumbai: India’s economy has witnessed remarkable expansion in recent years, driven largely by its rapidly evolving services sector, yet experts say the benefits of this growth remain unevenly distributed across the country.
For decades, India’s services industry was dominated by low-cost back-office operations providing support and consultancy services to companies in Western markets. Over the past ten years, however, this model has shifted toward advanced global capability centres where highly skilled professionals handle tasks ranging from information technology and data analytics to innovation and product design.
Major multinational firms have significantly expanded their presence in India. The world’s largest office of Amazon is located in southern India, while financial giant JPMorgan Chase employs a substantial portion of its workforce across Indian cities.
Government data also suggests the country now hosts nearly one-fifth of the world’s chip design engineers, many working with firms such as Qualcomm and MediaTek. This technological strength has supported robust growth, helping India retain its position as the world’s fastest-growing major economy since 2021.
The surge in economic activity prompted the government led by Narendra Modi to announce last year that India had surpassed Japan to become the fourth-largest economy globally, although recent estimates indicate that milestone may still be about a year away.
Economists say the progress remains notable nonetheless. Market reforms launched in the 1990s helped create a thriving software services sector now worth hundreds of billions of dollars, while infrastructure investments since 2014 including highways, airports and ports have accelerated economic expansion.
According to the World Bank, poverty levels have declined significantly, with the share of Indians living on $4.20 a day or less dropping sharply over the past decade. Rising incomes have also contributed to the emergence of a middle class estimated at more than 300 million people.
Despite these achievements, analysts caution that the country’s growth has not benefited all segments of society equally. A large share of the population still depends on agriculture for livelihoods, and many workers remain in low-productivity or informal sectors.
Economists argue that generating high-quality jobs is crucial as millions of young people enter the workforce each year. Shifting labour from farms to manufacturing industries is widely seen as key to achieving sustained development.
While companies such as Apple have begun assembling products like iPhones in India, the country has yet to emerge as a large-scale manufacturing hub.
In rural regions, the gap between headline growth figures and everyday realities remains stark. Many villagers continue to rely on agriculture and government employment schemes to supplement income, reflecting the ongoing challenge of ensuring that economic progress reaches every part of the country.