New York, NY – In a promising turn of events, India, the world’s fifth-largest economy, is on track to surpass Japan and secure its position as the third-largest global economy by 2030. S&P Global Market Intelligence, in its latest report, predicts that India will achieve this remarkable feat with a GDP expected to reach a staggering USD 7.3 trillion.
Having experienced two years of robust economic growth in 2021 and 2022, India continues to exhibit remarkable resilience and strength throughout the calendar year 2023. The country’s gross domestic product (GDP) is anticipated to expand by 6.2-6.3 percent during the fiscal year ending in March 2024, positioning it as the fastest-growing major economy this fiscal year. Impressively, Asia’s third-largest economy witnessed a substantial 7.8 percent growth in the April-June quarter.
S&P Global has further reinforced this positive outlook, stating that the Indian economy is set for continued rapid expansion in 2023 and beyond, driven by a surge in domestic demand.
The inflow of foreign direct investments into India over the last decade has underlined the favorable long-term prospects of the Indian economy, fueled by a youthful demographic profile and a remarkable rise in urban household incomes.
S&P Global’s report projects that “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.”
India’s economic ascendancy is already apparent. By 2022, the Indian GDP had surpassed that of the United Kingdom and France. By 2030, it is expected to outgrow Germany’s economy.
At present, the United States boasts the world’s largest economy, with a GDP of USD 25.5 trillion, accounting for a quarter of the world’s GDP. China is the second-largest economy, with a GDP of approximately USD 18 trillion, constituting almost 17.9 percent of the global GDP. Japan is a distant third with a GDP of USD 4.2 trillion, followed by Germany with a GDP of USD 4 trillion.
S&P Global highlights several key growth drivers that support India’s long-term economic prospects. “An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending. The rapidly expanding Indian domestic consumer market, coupled with its significant industrial sector, has made India an increasingly attractive investment destination for multinational corporations across various sectors, including manufacturing, infrastructure, and services.”
India’s ongoing digital transformation is expected to expedite the growth of e-commerce, reshaping the retail consumer market landscape over the next decade. This transformation is drawing leading global tech and e-commerce giants into the Indian market.
“By 2030, 1.1 billion Indians will have internet access, more than doubling from the estimated 500 million internet users in 2020,” S&P Global reports. “The rapid growth of e-commerce and the transition to 4G and 5G smartphone technology will propel home-grown unicorns like online e-commerce platform Mensa Brands, logistics startup Delhivery, and the fast-growing online grocer BigBasket, whose e-sales have surged during the pandemic.”
The significant influx of foreign direct investment into India, witnessed over the past five years, continues with robust momentum, even through the challenging pandemic years of 2020-2022.
“India’s strong FDI inflows have been bolstered by substantial investments from global technology giants like Google and Facebook, who are drawn to India’s vast and rapidly growing domestic consumer market, along with a notable increase in foreign direct investment from manufacturing firms,” notes S&P Global.
In conclusion, India is expected to maintain its status as one of the world’s fastest-growing economies over the next decade. It is poised to become one of the most crucial long-term growth markets for multinational companies across a wide spectrum of industries, from autos, electronics, and chemicals to services encompassing banking, insurance, asset management, healthcare, and information technology.
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