India on track to become world’s third-largest economy by 2030

DUBAI / WAM

The Indian economy has been on a growth path for years, now ranking as the fifth-largest economy in the world, behind only the United States, China, Germany, and Japan. In recent years, it has surpassed the economies of France and the United Kingdom. According to estimates and forecasts from international institutions, including the International Monetary Fund (IMF), the Indian economy will surpass the $4 trillion mark for the first time in 2024, and will continue to grow to surpass the Japanese and German economies by 2030, reaching third place.
The IMF’s World Economic Outlook report released in January, expects growth in India to remain strong at 6.5 percent in 2024 and 2025, raising its forecast for growth in the fifth-largest economy in the world by two percentage points for the two years, reflecting the strength of domestic demand. The fund’s data indicates that growth will push the
Indian economy to around $6 trillion by 2028. Standard & Poor’s Global Ratings said in a previous report that India will remain the fastest-growing major economy and is on track to become the third-largest economy in the world by 2030.
According to the agency, India’s GDP is expected to soar from around $3.5 trillion in 2022 to a staggering $7.3 trillion by 2030. This rapid economic expansion will propel India past Japan’s GDP by 2030, solidifying its position as the second-largest economy in the Asia-Pacific region and the third-largest globally, leaving Germany in its wake. Notably, this achievement follows India’s previous leapfrogging of the United Kingdom and France’s economies just two years ago. Several key growth drivers underpin the agency’s optimistic long-term forecast for India’s economy. Among the positive factors propelling India forward is its massive and rapidly expanding middle class, fuelling consumer spending in the country. Additionally, the ongoing digital transformation
revolutionising India is expected to significantly accelerate e-commerce growth and dramatically reshape the consumer retail landscape within the next decade. This shift has already attracted leading global technology and e-commerce multinationals to the Indian market, eager to capture a share of this burgeoning opportunity. Beyond these two major factors, the agency highlights several other elements expected to contribute to India’s economic surge in the coming years. These include a young and increasingly productive population, a supportive government policy environment, escalating investments in infrastructure development, and a thriving startup ecosystem brimming with innovation. With these powerful forces propelling it forward, the agency expresses strong confidence in India’s economic prospects, anticipating continued rapid growth in the years to come. India is expected to remain one of the fastest growing economies in the world over the next decade, making it one of the most important long-term growth markets for multinational companies in a wide range of industries, including manufacturing such as automobiles, electronics and chemicals, and services such as banking, insurance, asset management, healthcare and information technology.
Deloitte Global said in its India Economic Outlook report in January this year that “India has come a long way in the last decade to become a global economic power.”
A decade ago, the Indian economy was highly volatile, but this has changed in recent years due to a number of factors. India has taken decisive and focused steps to transform knowledge and capabilities into unique products and solutions. India’s focus on using technology to accumulate and disseminate tacit knowledge, build advanced manufacturing capability, and improve competitiveness through exports have been the three essential catalysts that have boosted its growth trajectory and improved its economic fundamentals over the years.