India to be the third-largest economy in the world

Union External Affairs Minister S Jaishankar said that by the end of the decade, India will be the most populous country and almost certainly be the third-largest economy in the world. "Our human resources will be critical for the global economy by 2030 in a world dominated by artificial intelligence," he said at the G20 University Connect in Delhi.

In a report Morgan Stanley had said that India is on track to become the world’s third largest economy by 2027, surpassing Japan and Germany, and have the third largest stock market by 2030, thanks to global trends and key investments the country has made in technology and energy.

India is already the fastest-growing economy in the world, having clocked 5.5% average gross domestic product growth over the past decade. Now, three megatrends—global offshoring, digitalization and energy transition—are setting the scene for unprecedented economic growth in the country of more than 1 billion people. India is also poised to become the factory to the world, as corporate tax cuts, investment incentives and infrastructure spending help drive capital investments in manufacturing.

S&P’s forecasts that India’s annual nominal gross domestic product growth will average 6.3% through 2030. Similarly, Morgan Stanley estimates that India’s GDP is likely to more than double from current levels by 2031.

“In a world that is currently starved of growth, the opportunity set in India must be on global investors’ radar, Morgan Stanley reports. India will be one of only three economies in the world that can generate more than $400 billion annual economic output growth from 2023 onward, and this will rise to more than $500 billion after 2028. These drivers will make India the world’s third-largest economy and stock market before the end of the decade.”

India posted a year-on-year growth of 6.3% for the July to September quarter, fractionally higher than a Reuter’s poll forecast of 6.2%. Prior to this, India recorded an expansion of 13.5% for April to June compared to a year ago, buoyed by robust domestic demand in the country’s service sector.

S Mohini Ratna, Editor, VARINDIA