India: A tiger on the brink of a breakthrough

India stands out not only for its extraordinary cultural diversity, aromatic spices and traditions dating back thousands of years. The BRIC country is growing faster than any other major economy and therefore deserves greater attention from investors, not only for diversification reasons.

By Nayan Srivastava, Managing Partner, RootBridge

India’s nominal gross domestic product stands at around US$4.2 trillion, with purchasing power parity of approximately US$17.2 trillion. This already makes India the world’s fourth-largest economy. With current economic growth of 6.4%, according to the IMF, India continues to grow significantly faster than the global economy. In the coming years, the country on the banks of the Ganges will overtake other major economies.
A key driver of growth is demographics: with around 1.5 billion people, India is the world’s most populous country. The median age is 28.1 years—significantly lower than that of China, Germany and Japan. Over several decades, this young population creates the potential for rising incomes, growing consumption and a larger workforce.

Digital infrastructure across the country
At the same time, India is still in the early stages of urbanisation. In 2024, around 35.4 per cent of the population lived in cities, compared with approximately 66 per cent in China and around 80 per cent in the US. Since 1960, India’s urban population has grown from 78 million to more than 513 million. The continued shift to cities—not only Tier 1, but also Tier 2 and Tier 3—will further drive productivity, consumption and economic connectivity.
Digital infrastructure plays a particularly important role here. The Aadhaar biometric identity system covers around 1.4 billion people. Together with the Unified Payments Interface for cashless, real-time transfers and the interfaces of the IndiaStack architecture, it provides the foundation for a low-cost, interoperable digital financial system and digital business models. In 2023, 129.3 billion real-time transactions were processed in India—nearly 49 per cent of the global Total Fina Elf .

Digitalisation is also reaching an ever-larger share of the population. India was estimated to have more than one billion internet users in 2025, making it the world’s second-largest internet population after China. Its relatively low internet penetration points to further growth, as each additional percentage point represents several tens of millions of people. Digital payments have now become standard in most parts of the country. They are also creating new opportunities for loans, insurance and investment products.

A bank with 58 times as many customers as Switzerland’s population
Access to financial services has also expanded considerably. The share of adults with an account at a formal financial institution rose from 35 per cent in 2011 to 89 per cent by 2025. Although around 16 per cent of accounts remain inactive, the foundations for broader financial inclusion are in place. State Bank of India alone serves around 520 million customers—about 58 times the population of Switzerland.
India is also benefiting from the realignment of global supply chains. Under the China+1 strategy, production capacity has shifted to India. The country now produces around 25% of all iPhones worldwide. Smartphone exports reached US$24.1 billion in the last financial year. At the same time, the domestic market is growing: the number of mobile subscriptions rose from around three million in 2000 to almost 1.2 billion by 2024.

100 new airports planned
There is still considerable potential in e-commerce, too. The market is expected to grow from US$70–80 billion in 2024 to US$180–200 billion by 2030. At present, only around 20 to 25 per cent of Indian internet users shop online. Tier 2 and Tier 3 cities are seeing particularly strong growth. They already account for more than 60 per cent of e-commerce deliveries. Incomes in these cities are also growing faster than in the major metropolitan areas.

Physical infrastructure is being expanded in parallel. The national highway network grew by 61 per cent in a decade, reaching 146,560 kilometres. In May 2026, India had 163 operational airports. The UDAN 2.0 programme also envisages 100 new airports over the coming decade. Improved roads, airports, rail links and ports are expected to make supply chains more efficient and support economic development beyond the major cities.

Third worldwide for installed renewable energy capacity
Structural progress is also evident in rural areas. Under the Jal Jeevan Mission, more than 158 million rural households have been connected to piped water since 2019. This can reduce the time spent collecting water, improve health and increase household productivity.
India ranks third worldwide for installed renewable energy capacity. In the 2025–26 financial year, 55.29 GW of non- Fossil capacity was added. Solar capacity has grown 53-fold since 2014. Non- Fossil sources accounted for 29.2 per cent of India’s electricity generation. Among Fossil fuels, coal is the dominant energy source, at around 96 per cent, while the shares of oil and natural gas are minimal. This energy mix creates strong independence from geopolitical effects.

Most IPOs worldwide in 2025
Increasing economic formalisation is also reflected in the capital markets. In 2025, US$60.7 billion flowed into private equity and venture capital investments. Exits reached US$32.9 billion, while fundraising by Indian funds hit a record high of US$23.2 billion.
In public markets, India trades at a 53 per cent valuation PREMIUM to the emerging-market average. However, an allocation consisting exclusively of listed equities captures only a small and concentrated part of India’s business landscape. Fewer than one per cent of companies are listed. In 2025, India recorded 367 IPOs, ranking first worldwide.

The key opportunity lies in the combination of these developments: India is digitalising and formalising its economy, continuing to urbanise and expanding its infrastructure, while also benefiting from a young population and rising incomes. Listed investments capture only a limited part of this development, while traditional private equity investments often involve long lock-up periods. This raises the question of how investors can best gain access to the full breadth of the Indian economy.

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