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India, currently the world’s fifth-largest economy, is on track to become Asia’s second-largest economy, surpassing Japan by 2030, according to the latest issue of the PMI from S&P Global Market Intelligence. This optimistic projection is based on India’s remarkable economic growth over the past few years, with expectations that its GDP will reach USD 7.3 trillion within the next decade.
India’s Gross Domestic Product (GDP) is anticipated to grow by 6.2-6.3% in the fiscal year ending in March 2024, solidifying its position as the fastest-growing major economy in the current fiscal year. The country’s remarkable performance was evident in the April-June quarter, where it achieved an impressive 7.8% growth rate.
S&P Global acknowledges the vital role of domestic demand in fueling India’s continued expansion. Additionally, foreign direct investment inflows have surged over the past decade, reflecting the nation’s promising long-term growth prospects. Factors contributing to India’s economic ascent include a youthful demographic profile and rapidly increasing urban household incomes.
The report states, “India’s nominal GDP measured in USD terms is forecast to rise from USD 3.5 trillion in 2022 to USD 7.3 trillion by 2030. This rapid pace of economic expansion would result in the size of the Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region.”
By 2022, India’s GDP had already surpassed that of the United Kingdom and France. The report predicts that by 2030, India’s economy will also outstrip Germany’s. The United States currently holds the title of the world’s largest economy with a GDP of USD 25.5 trillion, followed by China as the second-largest economy with a GDP of approximately USD 18 trillion. Japan is currently third with a GDP of USD 4.2 trillion, followed closely by Germany with a GDP of USD 4 trillion.
S&P Global underscores several key growth drivers supporting India’s long-term economic outlook. The nation’s burgeoning middle class plays a pivotal role in driving consumer spending, making it an attractive destination for multinational corporations across various sectors, including manufacturing, infrastructure, and services.
India’s ongoing digital transformation is set to revolutionize the e-commerce landscape, attracting global technology and e-commerce giants to the Indian market. The report notes that by 2030, over 1.1 billion Indians will have internet access, more than doubling from the estimated 500 million internet users in 2020.
India’s remarkable growth trajectory has also been buoyed by substantial foreign direct investment (FDI) inflows. Notably, global technology giants like Google and Facebook have been drawn to India’s rapidly expanding domestic consumer market, contributing to the surge in FDI.
Overall, India is poised to remain one of the world’s fastest-growing economies over the next decade. This growth is set to establish India as a crucial long-term growth market for multinational corporations in a wide range of industries, including manufacturing, finance, healthcare, and technology.
This economic resurgence underscores India’s growing prominence on the global stage, with promising implications for its citizens and international investors alike.
Sources By Agencies
