Twenty Three for 2023: 23 ‘boats’ that must rise this year for India’s economy to weather

The Indian economy has been sailing safely and speedily in a sea of global uncertainty, but the ride may get turbulent in the new year. Here are 23 ‘boats’ that must rise in 2023 for India’s economy to weather the storm.

1 The Renewables: Will the energy transition speed up?
Solar and wind energy will gather pace in 2023 as local supplies improve, helping India cut emissions. India will have to aim for at least 20-25 GW of renewable energy in 2023, and in the years ahead, to achieve the 500 GW target by 2030. The huge potential is driving interest in the sector with over Rs 2 lakh crore ($25 billion) investment expected in the EV ecosystem, manufacturing of solar equipment, energy storage tech, and production of green hydrogen. Though wind equipment is produced locally, solar is heavily import-dependent — up to 90%. The good news is that over `8,700 crore of domestic capacity is expected soon. Big corporate investments with global-scale economics look to be taking off. Adani Solar has begun manufacturing large-sized monocrystalline silicon ingots in India while RIL is readying to launch its battery packs in 2023. A Rs 19,500 crore PLI scheme will fire around 40GW capacity with bids expected in 2023. Bids for 4GW offshore wind projects and manufacturing of electrolysers will also roll out in the new year. Blending of ethanol with petrol will gather steam, bringing some relief to the import bill although green hydrogen may have to wait longer before making a debut.

2. In the Crypt: Can crypto survive its hunters?

The year 2022 was a wake-up call for cryptocurrency investors. The collapse of FTX and the two popular digital currencies and stablecoin TerraUSD earlier in the year, drove home the risks. Back home, RBI governor Shaktikanta Das has warned the next financial crisis will occur due to private cryptocurrencies. The new calendar is not likely to bring any cheer. Global risk aversion, regulatory uncertainty over cryptocurrencies, and better appreciation of risk are likely to weigh down the asset that many saw as a way to super wealth. The decentralised nature of Web 3.0 makes regulating these virtual digital assets difficult, which means they will continue to face curbs with many central banks and governments unwilling to allow a free run to a parallel currency. That money laundering, terror financing and illicit fund flows are part of the crypto discussion does not help. As per WazirX, crypto trade volumes in January-November 2022 were 76% lower at $10 billion, from $43 billion in the same period last year. The year 2023 could well be when the crypto winter sets in, dealing a blow to many hoping to ride the boom. Over 80% of Indian investment in crypto assets in 2022 came outside of metros, from places like Lucknow, Jaipur, Pune and Patna, among others.

3. ReStartup: Will the startup ecosystem come out of the funding winter leaner, meaner?

As 2022 draws to a close, what’s clear among top startup entrepreneurs, investors, and internet industry executives is that the new year may have more pain in store — at least initially — for new-age firms before any relief comes their way. Venture funding has slowed significantly for growth-oriented startups, with 2022 already a weak year. According to Venture Intelligence, startups saw nearly $24 billion in funding in 2022 as of December 28, down from a peak of $35.46 billion last year. Correction in interest rates in the US from record highs and an improvement in sentiment will be crucial for the needle to move again in favour of startups. With over 100 unicorns in India, startups are emerging as one of the largest job generators as well as wealth creators via esops, buybacks, and mergers and acquisitions. Almost all startups, across stages, are hunkering down to extend their runways and cut costs at every possible opportunity. New startup launches have also slowed in 2022. Easing liquidity and financing conditions will be needed for more startups to be birthed in the country, leading to potential disruptions in large industries. The first quarter or two might see more struggle among startups to survive, but a relatively better second half could lift up 2023 for India’s internet economy, making it better than the year gone by.

4. Telecom Call: Will 5G change everything?

Blistering 5G speeds of up to 10 Gbps promise to transform the lives of millions of mobile users hooked to data, as 2023 rolls in. Thrills of superfast gaming, enhanced virtual reality and highresolution videos, to name a few, will be here soon as Reliance Jio and Bharti Airtel roll out countrywide 5G coverage. The 5G networks are set to disrupt processes, businesses and social interactions while creating opportunities. The networks will loop in smartphones, cars, homes, machines, robots and household gadgets, lighting up a true Internet of Things (IoT) ecosystem. A host of enterprise apps across industry verticals will emerge to ride this disruption, creating startups, wizards and billionaires. For the telcos, enterprise services, including captive private networks to power smart factories, will bring in untapped revenues going beyond voice and data. Ericsson sees 5G business services as a $17 billion revenue opportunity by 2030 for telcos in India. The paucity of mass-level 5G devices, which still straddle the premium range, means 4G services won’t go away anytime soon. 5G device penetration may improve in 12-18 months. Meanwhile, telcos may slice networks to reserve a chunk of 5G bandwidth for premium 5G enterprise services. Yes, data and network security will be more urgent as 5G permeates and the maze of connected devices becomes vulnerable.

5. Auto-matic: Will EVs gear up and gather pace?

After a breakthrough 2022, EV sales are set to gather pace in the new year with Tata Motors, Mahindra and MG Motor India rolling out half a dozen models in the mainstream segments. Over 100,000 EVs are expected to be sold next year, double the 50,000 in 2022. High fuel prices, increased offerings, and government incentives amid growing consumer awareness will speed up the shift to electric in the two-wheeler and three-wheeler segments. The charging infra is catching up, too, addressing the key concerns of buyers, while environmental concerns are providing the nudge. In the three-wheeler segment, where nearly half the vehicles sold are electric currently, the proportion is expected to increase further, driven by demand from the ecommerce sector, say industry executives. Electric two-wheeler makers say they can sell 2.5 million units next year, up from 624,189 in 2022 and about 233,000 in 2021, provided their incentive bills are cleared. Incentives of `1,100 crore under FAME II are pending because of an inquiry into the localised content as reported by some electric twowheeler makers. All niggles aside, 2023 could be a year when EVs go mainstream.

6. Flyover: Will Indians’ revenge travel and tourism continue?

Two years of pent-up travel demand has led to steep room rates, choc-abloc hotels, and airport congestion. The holiday season has never been better for the Indian hospitality industry. In late November, India’s domestic carriers flew over 400,000 passengers for two straight days, jumping to pre-Covid levels. Such has been the demand and the rush to travel domestically that most key travel operators and hospitality firms have seen business outperforming prepandemic levels by a sizeable margin. Recent data released by Airbnb shows overall nights booked in India grew by almost half, while domestic nights booked grew by 80% in the third quarter of 2022 compared with the third quarter of 2019. The Covid-19 outbreak in China and some other countries threatens to upend the recovery in the global travel and tourism industry. But the local industry is unfazed. Sector insiders do not see domestic revenge travel cooling off in 2023 if there is no sizable uptick in cases and curbs are not imposed. The party is set to continue in the new year.

7. Date with Data: Will the Digital India Bill finally give us privacy?

India, one of the largest data markets in the world, astonishingly does not have a contemporary legislation for governing the internet. The 22-year-old IT Act does not even mention the internet. The proposed Digital India Bill gives citizens hope that their non-personal data would be safe while the Digital Personal Data Protection Bill in 2023 would protect their personal privacy. The twin bills will change the way the internet is governed. Tech-savvy Indians will be regulated with legislation much more in tune with global standards. Social media platforms, ecommerce sites and fact-checking portals can also heave a sigh of relief as they are likely to be classified into different categories, with specific regulations for each. With emerging arenas such as blockchain and metaverse under the purview of the proposed law, entities operating in these spaces will get legal backing. The recently amended IT Rules allow for appellate panels to hear grievances against decisions of social media firms on hosting contentious content. The new amendments impose a legal obligation on companies to prevent barred content and misinformation. It may all come together in 2023.

8. Naturally AI: Will artificial intelligence tools move into the mainstream?

ChatGPT, a new chatbot that can almost appear human, has taken the artificial intelligence (AI) scene by storm. AI was a buzzword in 2022 even as the wider tech sector took a plunge. It’s stealthily permeating everything from business to finance to daily life, and the potential is limitless. India may not be at the cutting edge of AI development, but the country’s enormous tech sector is helping adoption worldwide. Experts say AI will soon go beyond customer support to facilitating end-to-end transactions — be it bill payments, submitting documentation for a loan, or even booking a flight. Industry leaders believe there are massive possibilities for AI to provide ‘India first’ solutions in sectors like agriculture, education, and health. For farmers, it could predict soil quality or weather, while predictive healthcare applications could warn of risks of certain diseases. In education, AI could take the load of teaching fundamental concepts, allowing teachers to focus on complex concepts. However, India Inc needs to catch up with policymakers. AI seems to be higher on the agenda of the government than business, perhaps deterred by the geopolitical complexities over data, the core of AI. Policymakers will need to use huge datasets to the country’s advantage, while companies will have to invest more in 2023 to harness AI’s potential.

9. Building Value: Will we witness a real estate boom after the pandemic bust?

After years of sluggishness and being laid low by Covid, 2022 was good for the real estate sector. But a confluence of risks — rising rates, global slowdown, inflation and the lingering pandemic — looms over the…