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In a significant projection, investment banking firm Jefferies has forecasted that India is on track to become the world’s third-largest economy by 2027, overtaking economic powerhouses like Japan and Germany. According to Jefferies, India’s GDP is poised to reach $5 trillion within the next four years, and the country’s economic trajectory suggests it will nearly double to nearly $10 trillion by 2030.
From its status as the ninth-largest economy a decade ago, India has steadily climbed the global economic ranks to currently hold the fifth position with a nominal GDP of $3.4 trillion. Notably, on a purchasing power parity (PPP) basis, India’s GDP already stands at an impressive $13.2 trillion, positioning it as the third-largest economy globally.
Jefferies attributes India’s remarkable economic growth to various factors, including the successful implementation of significant reforms such as the bankruptcy law, Goods and Services Tax (GST), Real Estate Regulation Act (RERA), and demonetization. While these reforms may have temporarily impacted near-term growth, Jefferies views them as beneficial for India’s long-term economic prospects.
The forecast suggests that India’s GDP growth is expected to outpace that of most large economies over the next five years, with projected growth rates around 6%. This growth outperformance, particularly against developed nations, is anticipated to propel India swiftly up the global GDP rankings to secure the third position by the end of the decade.
In addition to its economic growth prospects, Jefferies highlights the potential of Indian equity markets to deliver robust returns, estimating dollar returns of 8%-10% over the next five to seven years. The firm emphasizes structural domestic flows into equities and the potential listing of large unicorns in India as key drivers that could push the country’s market cap beyond $10 trillion by 2030.
Furthermore, Jefferies underscores the opportunity for foreign investors to increase their exposure to India, given its relatively low weight in global indices compared to its economic significance. A potential increase in India’s weight in global funds could make Indian stocks increasingly attractive to a broader spectrum of equity investors, further fueling market growth.
As India’s economic ascent continues unabated, stakeholders are closely watching developments, recognizing the country’s emergence as a key player on the global economic stage and the immense opportunities it presents for investors worldwide.
Sources By Agencies
