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This is our next special issue: a guest article on Why India Matters, and why Europe should focus on India.

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Today’s guest author is a fellow Riser.

Having worked in the Indo-European landscape with a focus on the India-Netherlands partnership for decades, Vijay Kumar Vaddadi has been a strong supporter of the Indo-European business corridor.

Vijay is a multi-faceted advisor:

For his contributions to the India-Netherlands partnership, Vijay has been honoured with the Award of the Knight of the Order of Oranje-Nassau by the King of the Netherlands in 2016 on King’s Day.

Let’s jump in.

From Vijay Kumar Vaddadi

India is not just rising. It is growing, it is surging. India is now the fourth largest economy in the world. According to a Morgan Stanley report, India will overtake Germany to become the world’s third largest economy by 2028. The world agrees that India’s economy is surging ahead and even the current geopolitical problems have not affected the country.

In this article, I will highlight why India’s growth is gathering pace and why the EU should slowly move away from its traditional investment destinations such as the USA and China and start focusing on India.

India has grown tremendously in the last decade, but not many are aware why and how this has happened. In my view, it is to do with the five ‘D’s’, namely, Democracy, Demography, Diversity, Digitalisation and Dynamism. Let me give you a brief overview of each of these parameters that have contributed to India’s growth story.

Since 1947, when India became independent from the British, India developed its own constitution and created a country that was run as a parliamentary democracy. Every five years, India has held federal elections and to the 28 state assemblies regularly. India, through its constitutional democracy, has evolved into the world’s largest democracy.

To give you an indication of India’s democratic might:

To date, India’s defence forces have never interfered or intervened in social, economic or political matters and are completely involved only in protecting the country from external threats. This is in stark contrast to several of India’s neighbouring countries, where armies have controlled governments and interfered in civilian matters.

India is not just a country with the largest population of over 1.4 billion. It is also a country with a huge demographic dividend. According to the United Nations Population Fund (UNPF), India’s demographic dividend is an opportunity to drive the country’s economic growth, with 68.7 percent of its population in the age group of 15-59, making it one of the youngest nations in the world.

India has the world’s largest youth population with the median age at 28.4 years. According to an Ernst & Young report, approximately 26% of the population is below 14 years and around 67% is between the age of 15 to 64 years and 7% above the age of 65. In contrast, the population over 65 years accounts for 17% in the US and over 21% in Europe. This is a big advantage for India as the age of its population will drive economic growth.

A young population means many more people

Without a doubt, India is today the largest human resources provider of skilled people across the world.

India is perhaps the most diverse country in the world. It has 18 official languages, over 200 dialects, over 700 tribes and a cultural, social, religious and ethnic diversity that exists nowhere else in the world. India has been the country of origin to numerous religions. Besides Hinduism, Buddhism, Jainism, Sikhism, many other smaller religions were born in India.

The Zoroastrians, who were persecuted in Persia, migrated to India hundreds of years ago where they were allowed to practice their religion. India is home to a large Christian population and it has the second largest Muslim population in the world after Indonesia. But India’s diversity is not restricted to its religions, but it is culturally diverse. Almost every state in the country has its own language, the language has its own unique script and across India, people speak multiple languages. India’s cuisine too is vast and varied. India’s customs and traditions too are vast and vary from region to region.

Why is this important? Diversity in a country helps people understand, respect and appreciate other cultures, which in turn makes it easy for them to adapt and learn new things. This is a very big advantage when people work with their counterparts in other countries as it helps them to integrate faster and work better as a team.

Digital India is a flagship programme of the Government of India and was launched in 2015. The objectives of Digital India are manifold, but the main aim is to create a technology savvy India where even the common man can have access to technology which in turn will help him/her to achieve one’s goals faster and in a smoother manner.

According to the State of India’s Digital Economy Report, 2024, unveiled by the Indian Council for Research on International Economic Relations (ICRIER), India comes in third place in terms of the digitalisation of the economy. India’s digital infrastructure has been a key driver of its third-place ranking. Perhaps, India’s biggest success in digitalisation has been the Unified Payments Interface or UPI. The UPI, developed by the National Payments Corporation of India (NPCI), is an instant payments system which began in 2016. The Unified Payments Interface (UPI) has transformed the digital payments market in India in many ways, especially when compared to the banking system in the United States and the EU.

UPI is a real-time, instant payment system that allows users to transfer money between bank accounts using multiple mobile apps. Since 2016, the impact of UPI on the Indian economy has been tremendous, as it has greatly simplified business-to-consumer, business-to-business, and peer-to-peer payments, promoting digital inclusion while reducing dependency on cash.

With UPI, India maintains its position as the global leader in instant payments, accounting for 49% of all global instant payment transactions in 2024. In April 2025 alone, 17.89 billion transactions were processed by UPI. The average daily transactions were 596 million in April 2025. Close to 80 percent of all digital payments in India are made through UPI. Many countries including France, Singapore and the UAE have shown interest in collaboration with the NPCI to develop similar digital payment systems in their countries.

India’s dynamism is clearly evident in the earlier four ‘Ds’ mentioned above. India’s dynamism is reflected in its innovation and start-up systems. The country is constantly changing and adapting itself to technological developments across the world. The Indian population being young, have been quick to absorb technology in an age when every day there’s something new cropping up. Whether it’s artificial intelligence or machine learning or blockchain, Indians are at the forefront of grasping these new technological developments and making innovative use of them for the benefit of India’s economic growth.

India now hosts the world’s third largest start-up ecosystem where innovation and technology development thrive in some of the best tech incubators anywhere in the world. India’s dynamism is visible in its ability to adapt and learn new technologies and even innovate using these new developments. The EU can have no better partner than India to power its growth engine.

I would like to end this article by focusing on another ‘D’ where India has lagged behind and needs to catch up if it wants a place in the first world. And this ‘D’ is Development. India may be driving towards becoming the third largest economy by the end of this decade, but unless it focuses on equitable development, India can never be called a developed country.

India’s economy may have crossed USD 4 Trillion in its GDP, but its per capita income was only USD 2,880 in 2025. India’s rank in GDP per capita is a distant 141 according to the IMF in 2025. Another problem that plagues India is inequality. Just 10 percent of India’s population control almost 77 percent of its wealth. Briefly, India has a long way to go to achieve a high rank in the sixth ‘D’, namely development. India and the EU can forge partnerships between companies, governments and educational institutions for mutual benefit. The EU can assist India with technology, design, R&D and development while India can provide the manpower, markets and cost-effective manufacturing facilities.

Let the partnership begin.

Sources: Morgan Stanley, United Nations Population Fund (UNPF), EY, India Charts, State of India’s Digital Economy Report 2024 by ICRIER, Wikipedia, The Economic Times, Startup India, The Hindu, IMF, Livemint

If you want to explore more on this topic or have questions, please reach out to the author via LinkedIn:

Vijay Kumar Vaddadi

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