Opinion By 2047, India can outdo China’s economy. For that, it must harness the power of AI

The next milestone? By 2047, when India celebrates 100 years of Independence, it should not just aspire but commit to becoming the world’s second-largest economy — outranking even China. This isn’t a pipe dream. It’s the inevitable trajectory of a nation that broke free from the bureaucratic shackles of the license raj and has spent the last three decades unleashing its economic potential. As management scholars and proud Indians, we are not just hopeful, we are convinced.

But let’s be clear: Climbing from number five to number two won’t happen through incremental improvements or by reusing past strategies. India needs a radical, transformative playbook. We call it a fusion strategy.

The power of fusion strategy

Tech titans like Facebook, Amazon, Netflix, and Google revolutionised Business-to-Consumer (B2C) markets by leveraging real-time consumption data. In the 20th century, movie studios tracked sales — how many tickets they sold. Netflix flipped the game by tracking how each user consumed content: What, when, where, and how. This granular insight enabled hyper-personalised recommendations, reshaping the entertainment industry. The result? A data-driven juggernaut that left traditional studios scrambling.

In 2007, before the iPhone’s debut, the world’s most valuable companies were ExxonMobil, GE, Toyota, and Royal Dutch Shell — giants built on physical products. Fast forward to today. In 2025, the landscape is dominated by digital and mobile technology. Microsoft, Apple, Nvidia, Alphabet, Tesla, Netflix, and Amazon now rule the market.

The $100 trillion global economy has seen a digital overhaul in the asset-light B2C sector, which represents 25 per cent of the GDP. But the real disruption is yet to come — the $75 trillion industrial sector is next. The next wave of globalisation will not be built on cost arbitrage but on the fusion of physical and digital domains — fusion strategy.

India’s next digital transformation must come from the business-to-business (B2B) industrial sector.

India’s fusion frontier: Revolutionising manufacturing

Take Mahindra & Mahindra (M&M), an industrial giant. In the 20th century, its competitive edge came from design, manufacturing, and sales. Back then, it tracked how many tractors it sold. But today, armed with smart sensors, AI, and computer vision, M&M can track how farmers use their tractors in real-time — every second, every movement.

Much like Netflix analyses viewing patterns, M&M can use AI to analyse real-time data from its machines. The implications are game-changing:

Predictive maintenance: Instead of waiting for breakdowns, AI-driven diagnostics ensure nearly 100 per cent uptime.

Uber-style equipment sharing: Farmers can rent underused tractors on demand, slashing costs and increasing efficiency.

Precision farming: By integrating data from weather patterns, soil conditions, and crop cycles, M&M can provide farmers with hyper-personalised recommendations on what to plant, when, and how — maximising yields.

This isn’t just about digitising old machines. This is about reimagining entire industries. And M&M is just one example. Imagine applying fusion strategy to:

Automotive & mobility — Self-optimising fleets that reduce fuel waste.

Personalised healthcare — AI-driven diagnostics tailored to individuals.

Smart homes — IoT-powered solutions adapting in real time.

Sustainable energy — AI-driven smart grids reducing power wastage.

The formula is simple — combine India’s industrial muscle with digital intelligence.

India’s unique edge

For India to secure the number two spot by 2047, its manufacturing sector must scale up massively. But low-cost manufacturing alone won’t cut it. India must own the global market for smart, connected, and AI-driven products.

India has several unique advantages that position it to lead the fusion revolution:

World-class digital infrastructure — India leapfrogged old telephone lines and built a state-of-the-art telecom network, delivering high-speed connectivity at some of the lowest costs in the world.

Digital public goods — Aadhaar (digital identity), DigiLocker (secure document storage), and UPI (seamless payments) have created a blueprint for digitised economies.

Physical infrastructure boom — Roads, ports, and logistics networks are expanding at an unprecedented pace, critical for scaling industrial output.

Demographic dividend — India boasts a young, dynamic workforce that can power a next-gen manufacturing boom.

Unparalleled talent pipeline — With 1.5 million engineering graduates and 3,00,000 MBAs annually, India has the intellectual firepower to execute this transformation.

Call to action

For too long, manufacturing has played second fiddle to IT services. That changes now. India needs a dedicated organisation, maybe a India@100: Fusion Strategy, led by Niti Aayog to drive this transformation. Much like NASSCOM spearheaded the IT revolution in the 1990s, this new initiative must bring together policymakers, business leaders, startups, VCs, and universities to make fusion strategy a reality. India must focus on these 11 high-potential, asset-heavy sectors — automotive and mobility, personalised health, smart homes, precision farming, customised education, sustainable energy, aerospace and defence, airline and aircraft operations, oil and gas, commercial vehicles, and personal mobility.

The future is now

At the turn of the 21st century, India’s IT sector redefined global technology. Now, 2025 marks a new inflection point. The next revolution will not be built on cheap labour or legacy factories. It will be driven by AI-powered, digitally integrated industries.

Fusion strategy isn’t just a concept — it’s a blueprint for India’s rise. The question isn’t if India will become the world’s number two economy. The only question is how fast we get there. As Mahatma Gandhi said, “The future depends on what we do in the present.” India must act — boldly, decisively, immediately. The sceptics will doubt. But the dreamers and builders will shape the future.

The world is watching. Let’s lead.

Govindarajan is the Coxe Distinguished Professor at the Tuck School of Business at Dartmouth College and Venkatraman is the David J McGrath Jr Professor in Information Systems at the Questrom School of Business, Boston University (Emeritus). They are the authors of Fusion Strategy: How Real-Time Data and AI Will Power the Industrial Future