Nandan Nilekani outlines four unlocks that can take India's growth to 8% from 6%

Maximizing AI penetration will unlock further economic potential, particularly in capital deployment, Nilekani added. Reiterating his earlier stance on land monetisation using tokenization and internet-based architecture, he said he believes it could create momentum in capital markets and infrastructure financing.

To reduce spatial inequality and drive broader economic participation, Nilekani called for a push to fund startups and businesses outside metro cities. He said that supporting entrepreneurs in small towns, villages, and rural areas was essential for inclusive growth.

Additionally, he highlighted the need to enable 10 million MSMEs with better access to technology, markets, and credit.

Nilekani identified formalisation as a key transformational lever. He proposed the creation of a national market for trustable credentials. He also called for a national market for benefits and for simplifying regulations, decriminalising compliance requirements, and reducing bureaucratic friction to support businesses.

"If we implement these eight recommendations, moving from 6% to 8% growth should be achievable," Nilekani said.

At the event, Nilekani and Arkam Ventures launched “The Great Unlock,” which is an effort that can propel India for the next decade. "At Arkam we are backing founders removing friction to consumption for hundreds of millions of Indians, founders who are providing tools to enhance MSME efficiency and founders who are boldly reimagining enterprise value chains for domestic and global markets," said Bala Srinivasa, Managing Director, Arkam Ventures.

Technology: AI and digital infrastructure

Nilekani said India’s rapid technological leap over the past decade, was enabled by digital public infrastructure (DPI) such as Aadhaar and UPI. With over 500 million smartphone users and 530 million WhatsApp users, India has built an unprecedented digital base.

Nonetheless, the next challenge is to bring a billion Indians into the AI-driven digital economy.

He said there's a need to build AI solutions tailored to India’s language diversity. Open-source AI models, such as AI4Bharat, are working to create Indian language datasets that can power AI-driven services in agriculture, education, and healthcare.

He said the government is planning an initiative called the Open Agri Network, which will use AI to deliver real-time agricultural insights to farmers.

Another major shift will come from affordable smartphone access, as telecom operators phase out 2G and 3G networks. With 4G and 5G devices becoming cheaper—potentially even below Rs 10,000—AI-driven digital services will become accessible to the next billion users.

"This is a big unlock where we use technology, DPI, and AI to reach a billion Indians," Nilekani said.

Capital: The “Ghar Wapsi” of firms

Nilekani pointed towards India's changing capital landscape, where the entire funding cycle, from seed to IPO, is now available domestically.

The country has 7,900 active angel investors, a strong venture capital ecosystem managing $45 billion in assets, and a growing pool of family offices investing in startups. Many Indian business families, instead of running operations, are transitioning into investors, contributing nearly $30 billion in capital.

Nilekani called out a major trend: the return of Indian startups to domestic markets. Companies that were once incorporated in Singapore or the US are now coming back to India and even paying high taxes. He cited Zepto, Razorpay, PhonePe, and Pine Labs as examples.

“Ghar Wapsi is happening. They're paying a tax premium and listing here, and you see this with Zepto, Razorpay, Phonepe, Pine labs and many others. So that only shows that the Indian capital market will be the most attractive place for IPOs in the next 10 years,” he added.

Meanwhile, while half the global markets are driven by passive investments, India's active investment culture is expected to drive the next wave of IPOs.

"It’s the perfect setup for more IPOs and rapid expansion," Nilekani said.

Entrepreneurship: 1 million startups

India’s startup ecosystem is experiencing a compounding effect, where successful founders are reinvesting in the next generation of entrepreneurs, India’s Chief Architect of Digital Public Infrastructure said.

Already, 2,000 funded startups have emerged from previous ventures, and by 2035, India could have a million startups, Nilekani predicted.

"We don’t know what it means if a million companies are all roaming around trying to fix problems, … and interestingly, more and more startups are happening outside the metros, and they are solving different issues," he added.

Citing government data, he said nearly half of India’s startups are based in smaller towns and cities, solving region-specific challenges. Apnamart, a DMart-like retail chain focused on smaller cities, is one example of this emerging trend, he said.

Formalisation: The biggest unlock

While India's workforce remains among the least formalised globally, Nilekani sees an AI-native workforce and regulatory reforms as key to unlocking productivity.

By 2035, half of India's workforce will be Gen Z, a generation that has never known a world without smartphones. This, combined with increased female workforce participation, will fundamentally reshape India’s labour market.

He referred to PhysicsWallah as an example of India’s new digital economy. Founder Alakh Pandey built a billion-dollar company by bringing together three key enablers: Jio’s affordable data, YouTube’s content platform, and UPI for micropayments. "This combination—AI, digital platforms, and payments—is going to create many more such enterprises," Nilekani said.

However, India’s regulatory framework still reflects outdated socialist-era and colonial laws, creating friction for entrepreneurs. He said there’s an urgent need need for simplifying compliance, reducing regulatory burdens, and decriminalising business laws to encourage entrepreneurship.