Recently, India’s G20 Sherpa, Amitabh Kant, has emphasized the critical role of sunrise sectors for India to become a developed nation and achieve a $32 trillion economy by 2047.
Key Highlights of the Address
- Global Leadership in Sunrise Sectors: India must become a global champion in sunrise sectors to secure its economic future.
- Manufacturing of solar panels and electric vehicles (EVs) is vital to reducing dependence on imports and boosting domestic capabilities.
- Technological Shifts and Clean Energy: A radical shift towards cutting-edge technology is essential for India to remain competitive globally.
- Delivering cost-competitive clean technology solutions is critical to maintaining economic and environmental sustainability.
- Private Credit to GDP: India’s private credit-to-GDP ratio lags behind that of the US, Europe, and China. Increasing this ratio is essential to fuel growth in emerging sectors.
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What are Sunrise Sectors?
- Definition: Sunrise sectors are industries in their nascent stages but expected to grow rapidly and significantly impact the global economy.
- Examples:
- Clean Energy: Solar, wind, and green hydrogen.
- Electric Mobility: EV manufacturing and battery technologies.
- Digital Technologies: Artificial intelligence, blockchain, and quantum computing.
- Biotechnology: Genome editing and synthetic biology.
- Significance:
- Drive economic growth by creating jobs, fostering innovation, and improving competitiveness.
- Contribute to sustainability goals and energy independence.
Sunset Industry
- A sunset industry refers to an established sector experiencing decline due to factors such as poor market demand, lack of technological advancement, or changing consumer preferences.
- Characteristics:
- Decline in profitability and growth.
- Inability to adapt to new technology or market trends.
- Redundant machinery and high operational costs.
- Lack of product innovation and muted funding.
- Reasons for Decline:
- Limited innovation and stagnation in ideas.
- Market vulnerabilities and customer preference shifts.
- High costs of technological upgrades.
- Examples:
- Typewriter manufacturing: Replaced by computers and digital devices.
- Coal-based power plants: Declining due to a shift towards renewable energy.
- Landline telephony: Outpaced by mobile and internet communication technologies.
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Exemplary Progress in Sunrise Sectors
- Renewable Energy: India ranks third globally in renewable energy capacity and is rapidly expanding its solar and wind power infrastructure.
- Initiatives like the National Solar Mission aim to install 500 GW of renewable capacity by 2030.
- Electric Vehicles: EV adoption has increased significantly, supported by initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme.
- Major auto manufacturers are investing in lithium-ion battery production and EV ecosystems.
- Digital Transformation: India has become a hub for startups in AI, machine learning, and blockchain, with increasing global recognition.
- Programs like Digital India and Startup India have fostered a conducive environment for tech-driven growth.
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Challenges for Sunrise Sectors in India
- Technological Lag: Indian industries, particularly in solar panel manufacturing, are 5-7 years behind global competitors, limiting market leadership opportunities.
- Infrastructure and Investment Gaps: Lack of advanced infrastructure for EV charging, renewable energy storage, and digital networks hampers scalability.
- Insufficient private credit to GDP ratio limits capital availability for startups and new ventures.
- Policy and Regulatory Barriers: Complex regulatory frameworks and delayed policy implementation discourage private investment.
- Import dependence on critical technologies and components increases costs and hinders domestic innovation.
- Skilled Workforce Deficit: A shortage of skilled professionals in cutting-edge fields like AI, renewable energy, and biotech constrains industry growth.
- High Dependence on Fossil Fuels: Despite strides in renewable energy, fossil fuels still dominate India’s energy mix, delaying the transition to clean energy.
Way Forward
- Policy Reforms and Incentives: Simplify regulatory frameworks to attract domestic and foreign investment in sunrise sectors.
- Offer tax breaks and subsidies for companies investing in clean energy and emerging technologies.
- Boosting Research and Development: Increase public and private investments in R&D, particularly in areas like EV batteries, solar panels, and AI applications.
- Establish centers of excellence for innovation in sunrise industries.
- Infrastructure Development: Expand infrastructure for EV charging stations, renewable energy grids, and digital networks to support growth.
- Develop industrial clusters for sectors like solar and EV manufacturing.
- Enhancing Financial Access: Strengthen India’s private credit-to-GDP ratio by encouraging banks and financial institutions to extend credit to startups and small businesses in sunrise sectors.
- Skill Development: Launch nationwide programs for upskilling and reskilling in emerging technologies.
- Collaborate with academic institutions to create industry-relevant curricula.
- Global Collaboration: Forge international partnerships for technology transfer and co-development in areas like green hydrogen and AI.
- Leverage platforms like G20 to position India as a hub for sustainable innovation.
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Measures Taken to Boost Sunrise Sectors in India
| Measure |
Description |
Target |
| Make in India |
Aims to encourage manufacturing in India by providing incentives and reducing regulatory hurdles. |
To increase manufacturing’s share in GDP to 25% by 2025. |
| Atmanirbhar Bharat |
Promotes self-reliance by boosting domestic industries and reducing import dependence. |
To create a self-reliant economy with a focus on critical sunrise sectors. |
| Production-linked Incentive (PLI) Schemes |
Offers financial incentives to boost manufacturing in key sectors like Advanced Battery Storage, Pharmaceuticals, and Semiconductors. |
To attract investments of ₹1.97 lakh crore and create jobs across industries. |
| Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) |
Encourages EV adoption by offering subsidies for electric vehicles and charging infrastructure. |
Targeting EV penetration of 30% by 2030. |
| National Quantum Mission |
Focuses on quantum computing and technology development in India. |
To build quantum computers with 50 qubits by 2030. |
| National Electric Mobility Mission Plan |
Supports the development and adoption of electric and hybrid vehicles. |
To make India a leader in EV manufacturing by 2026. |
| PM Formalisation of Micro Food Processing Enterprises (PM-FME) |
Provides financial, technical, and business support to micro food processing units. |
Formalize 2,00,000 enterprises and support ODOP (One District, One Product) by 2025. |
January 14, 2025
