How Indian GDP Growth Can Affect Startups In 2024?

As per a recent report from the statistics ministry on February 2024 the Indian economy grew by 8.4% during the October-December quarter of FY 2024 making India the fastest-growing major economy. This surprised the economists as they expected a slow growth rate due to several factors such as slow industrial output growth, uneven monsoon, and more. 

However, this growth rate can be a plus point for startups in India and can unlock an omnichannel growth model for them. In this post, I Shubham Pareek, the CEO of Appic Softwares will inform you on how a GDP rise can be beneficial for upcoming startups, so let’s dive in and check the content of this post:

• Last 3 Quater GDP Report
• Major Reasons For GDP Growth
• How Does Indian GDP Growth Affect Startups?

Last 3 Quater GDP Report

• During the quarter of April-June 2023, the Indian GDP saw 7.8% growth. 

What PM Narendra Modi Has to Say About The Indian GDP Growth Rate?

Major Reasons For Q3 GDP Growth

There are several factors that led to an increase in the GDP of India in Q3. Let’s have a look at all these factors:

• Sectoral Performance

GDP growth as a whole is impacted by the expansion of certain industries, such as manufacturing, services, and construction. A robust performance of critical industries as a result of favorable regulations, rising demand, or technical developments can propel the economy as a whole. In FY 2024, the building industry had double-digit growth, driven by strong demand from homeowners and government support for the infrastructure sector. The significant growth in FY 2024 has also been attributed to the strong growth in the manufacturing and services sectors in Q3 of FY 2024. Overall, agricultural growth is still modest, but GDP growth is nevertheless steadily supported by private spending.

• Economic Growth

Many economies, have seen a recovery in economic activity since the COVID-19 epidemic and related lockdowns were lifted and businesses were able to continue operating.

• Government Stimulus 

Economic expansion may have resulted from government policies and stimulus programs meant to promote economic growth, such as infrastructure spending, tax breaks, and monetary policies that enhance credit availability.

• Consumer And Business Confidence 

Spending and economic growth are stimulated by improvements in business and consumer morale, which are fueled by things like falling unemployment rates, more investment, and confidence about the future.

How Does Indian GDP Growth Affect Startups?

The effect of GDP increase on startups can be both direct and indirect, impacting various aspects of their operations and growth potential:

• Increased Consumer Spending: A rise in GDP typically indicates increased consumer confidence and spending power. This can directly benefit startups by expanding their customer base and increasing demand for their products or services.
• Access to Capital: A growing economy often leads to improved access to funding for startups. Banks and investors may be more willing to provide loans or venture capital to new businesses, enabling startups to expand operations, invest in research and development, or scale their businesses more rapidly.
• Market Expansion: With a higher GDP, domestic markets may expand as people have more disposable income to spend. Additionally, international markets may become more accessible as global trade increases. Startups can capitalize on these opportunities by expanding their reach and exploring new markets for their products or services.
• Innovation and Entrepreneurship: Economic growth fosters an environment conducive to innovation and entrepreneurship. Startups may benefit from increased support for research and development, as well as a greater willingness among consumers to try new products or services. This can spur creativity and differentiation within the startup ecosystem.
• Regulatory Environment: Improvements in GDP may lead to favorable changes in the regulatory environment, such as tax incentives or reduced bureaucratic hurdles for businesses. These changes can make it easier for startups to operate, grow, and compete in the marketplace.
• Talent Acquisition: A growing economy often results in increased demand for skilled workers. While this can pose challenges for startups competing with larger companies for talent, it can also create opportunities for startups to attract high-caliber employees who are drawn to the dynamic and innovative nature of startup environments.
• Risk Appetite: During periods of economic expansion, investors and consumers may have a higher tolerance for risk. This can lead to increased investment in startups and a greater willingness among consumers to try new products or services, which can be advantageous for startups seeking to gain traction in the market.

Conclusion

Now, in the end, we hope that through this post you were able to know how Indian GDP rose and be beneficial for startups. If you are an upcoming startup and still confused on whether this is the right time or not then we have already stated the reasons why you should get started. 

Moreover, if you are looking for a company that helps Startups with a consultation to software development, then you must check out Appic Softwares. We have an experienced team of developers and business analysts who understand your requirements and works dedicately for you. 

So, what are you waiting for?

Contact us now!