India’s great transformation continues

Summary

India’s economy and financial markets continue to evolve. Government incentives and strategic investment are expanding domestic manufacturing, while rising incomes are shifting spending “from essentials to extras” and “from basic to premium”. Meanwhile, easier access for foreign investors and growing domestic participation are supporting the development of India’s financial markets. Building on last year’s paper, India’s great transformation: opportunities for global investors, this updated infographic brings together refreshed data on these trends and their implications for investors.

Make in India : advancing the manufacturing transformation

Government incentives and global partnerships are helping India expand local manufacturing and increase exports. Investment in semiconductor projects aims to strengthen chipmaking capabilities and reduce reliance on imports, while defence spending is supporting a greater role for Indian suppliers.

Three-column infographic on India’s electronics, semiconductor and defence sectors, showing imported phones falling from 75% to 0% in 2014-2024, $18.6bn committed to approved semiconductor projects, and 75% of the FY2026-27 defence procurement budget for Indian suppliers.

India’s consumers: the spending shift continues

As incomes rise, consumers are spending more on goods and services beyond everyday essentials, while higher-income households are increasingly choosing premium products. Growing fast fashion sales and wider ownership of household appliances illustrate how India’s spending habits are evolving.

Bar-and-line chart showing fast fashion sales in India rising from FY17 to FY26, with sales climbing from about INR 40bn to over INR 300bn and the share of total fashion sales increasing from roughly 14% to 31%, reflecting sustained category expansion.

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Alessia BERARDI

Head of Global Macroeconomics & Emerging Markets Strategy, Amundi Investment Institute

India’s consumption habits continue to evolve in two main ways: consumers are buying more goods and services beyond everyday essentials, while higher-income households are increasingly choosing premium products.

Clustered bar chart showing household ownership of refrigerators, washing machines, air conditioners, microwaves and dishwashers rising from 2000 to the 2026 estimate, with refrigerators highest and dishwashers lowest throughout, highlighting wider appliance penetration.

Three reasons India remains in focus for investors

Two-panel dot chart comparing expected 10-year returns across government bonds and equity markets, with India at 6.7% for bonds and 7.8% for equities, and China equity highest at 9.3%; other markets range from low 2.1% bond returns to around 7.2% in equities.

Both Indian equities and bonds display relatively low correlation to traditional building blocks, largely thanks to the diversification benefit of the currency exposure.

Correlation heatmap of major asset classes and currencies, including global aggregate bonds, high yield, EM debt, world, EM, China and India equities, plus INR/USD. Colors run from green for negative correlation to red for positive correlation across the matrix.

	Indian government bonds’ inclusion in the JP Morgan GBI‑EM Index has increased the demand from funds that track the index.
	Faster registration makes it easier for foreign portfolio investors to access India’s markets.
	Growing domestic savings and demand from institutional investors are helping deepen markets and improve stability.