India Poised to Become Third-Largest Global Economy by 2030, S&P Global Predicts Rapid Growth

Updated Fri, 08 Dec 2023 05:11 PM IST

Highlights

India's nominal GDP is forecasted to surge from $3.5 trillion in 2022 to an impressive $7.3 trillion by 2030. This projection positions India behind the United States and China, but ahead of other major economies like Germany and Japan.

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India is on track to become the world's third-largest economy by 2030, according to a report by S&P Global. Currently ranked fifth, with an economy exceeding $3.7 trillion, India's nominal GDP is forecasted to surge from $3.5 trillion in 2022 to an impressive $7.3 trillion by 2030. This projection positions India behind the United States and China, but ahead of other major economies like Germany and Japan.

S&P Global anticipates that India will be the fastest-growing major economy over the next three years. The rapid expansion is in line with Prime Minister Narendra Modi's confidence in India's economic prowess. In a recent address, he expressed assurance that India would soon be among the top three largest economies globally.

Reasons Behind Swift Growth

A pivotal factor in India's economic ascent will be its ability to evolve into a significant global manufacturing hub.

Source: safalta

The report highlights the need for a robust logistics framework to shift India from a service-oriented to a manufacturing-dominated economy. Success in this transition hinges on upskilling workers and increasing female workforce participation, unlocking India's demographic dividend.

The booming domestic digital market is expected to drive expansion in India's high-growth startup ecosystem, particularly in financial and consumer technology, over the next decade. In the automotive sector, India is well-positioned for growth, bolstered by infrastructure development, increased investment, and innovation.

The report also points out that India, along with other countries like Vietnam, could benefit from the reconfiguration of global supply chains. Strong and stable trade ties with the United States make India an attractive prospect in this context.

S&P Global projects India's economic growth at 6.4% for the current fiscal year, surpassing previous estimates. While the growth rate for FY25 remains at 6.4%, it is slightly lower than earlier projections. Forecasts for FY26 and FY27 are optimistic, with expected growth rates of 6.9% and 7%, respectively. Overall, the report paints a promising picture of India's economic trajectory, highlighting key areas for development and success in the coming years.

The report underscores key factors crucial to India's economic evolution, such as the shift towards becoming a global manufacturing hub, the need for a robust logistics framework, and the untapped potential of the country's demographic dividend through upskilling and increased female workforce participation. The booming digital market and advancements in the automotive sector further contribute to the optimistic narrative.

Why does S&P Global predict that India will become the third-largest economy by 2030

S&P Global bases its prediction on the rapid expansion of India's nominal GDP, expected to rise from $3.5 trillion in 2022 to an impressive $7.3 trillion by 2030. The report suggests that India will be the fastest-growing major economy in the next three years.

What are the current rankings of India and the top four economies according to nominal GDP

As of now, India holds the fifth position with an economy exceeding $3.7 trillion. The top four economies, in order, are the United States (around $27 trillion), China (around $17.7 trillion), Germany ($4.4 trillion), and Japan ($4.2 trillion).

What key factors does S&P Global identify as critical to India's economic evolution

S&P Global highlights the importance of India transitioning into a global manufacturing hub, emphasizing the need for a robust logistics framework. The report also underscores the significance of upskilling workers and increasing female workforce participation to unlock India's demographic dividend.

How does Prime Minister Narendra Modi express confidence in India's economic future

Prime Minister Modi has repeatedly expressed confidence that India will soon be among the top three largest economies globally. In a specific address, he stated that India is at a turning point and is guaranteed to become a global economic powerhouse in the coming years.

What are the key sectors expected to contribute to India's economic growth according to the S&P Global report

The booming domestic digital market is anticipated to drive expansion in India's high-growth startup ecosystem, particularly in financial and consumer technology. Additionally, advancements in the automotive sector, supported by infrastructure development, investment, and innovation, are expected to contribute to India's economic growth.

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