India's vast industrial development prospects
India has enormous long-term potential for industrial development. Nearly half its working population is still employed in agriculture, and mechanisation will push that labour into the cities and into industry.
India has enormous long-term economic potential for the country’s industrial development. India is the world’s labour treasure! According to the chart above, almost half of India’s working population (45.5%) is employed in agriculture. The rest of the employed population is spread across sectors such as construction (12.6%), trade, hotels and restaurants (12.1%), manufacturing (11.6%) and others. In the United States, by contrast, less than 4% of the economically active population works in agriculture. In Germany the figure is between 1% and 2% of the total working population. According to Rosstat, 4.466 million people worked in Russian agriculture in 2022, or 6.3% of all those employed in the economy. In Brazil, according to the World Bank, agricultural employment stands at 8.7%. In China, whose population is roughly equal to India’s, the share of the employed population in agriculture is 17.5%.
As Indian agriculture is mechanised and supplied with material and technical resources, a huge number of unemployed, economically active people will be released. This workforce will be redirected to India’s cities and industrial zones, which will spring up in great numbers as these labour resources flow in. That will drive rapid urban growth and development, expand every service sector in those cities and raise the overall prosperity of the population, much as happened in the developed Western countries in their time. In time this urbanised population will form a vast market, as in China, that will absorb everything produced in the country.
However, the flow of working-age people from rural regions to India’s industrialised cities, and the corresponding rapid development of the country’s industry that comes with urban growth, will demand a great deal of energy. A shortage of electricity will be a drag on India’s economic development. India will therefore develop every energy source — renewables, gas, coal, nuclear power, hydropower, biofuels and hydrogen — while for now placing its main emphasis on cheap energy, which means coal. India needs cheap energy, and in large quantities! Construction of coal-fired thermal power plants in India is growing every year, with coal accounting for more than 80% of the country’s total electricity generation, and India has accelerated the building of such plants. By some estimates India will commission 15.6 GW of new coal-fired capacity by the end of 2024 (Uzbekistan’s total generation from all energy sources, including hydropower, coal- and gas-fired thermal plants and renewables, is 13–15 GWh), and a further 65 GW of new coal capacity over the decade (I analysed India’s electricity generation on the channel on 29 August 2024. You can read that material here).