New Delhi: India is poised to carve out a prominent role in shaping the future of the world economy. India will surpass Japan and Germany in 2025 and 2027 respectively attaining the position of 4th largest in 2025 and 3rd largest in 2027.
India will be a $7 trillion economy by 2030, USD 19 trillion by 20240 and USD 34.7 trillion economy by 2027. The per capita income is anticipated at around USD 21000 per annum by 2047.
India is projected to attain the position of 2nd start up eco system in the world by 2023 and to enter among the top 5 countries in the logistics performance index.
Various reports released by the national and international organisations ink India’s robust growth trajectory in the coming decades.
The recent IMF’s report on World Economic Outlook released in 2024, projects that India's GDP to remain robust, with an estimated growth rate of 7.8 percent in 2023–24 and 6.8 percent in 2024–25. The growth is expected to reach 6.5 percent in 2025–26, supported by the continued strength of domestic demand and the expanding working-age population.
India’s growth rate is projected to surpass all the emerging markets and developing economies. Inflationary expectations are also expected to subside, with an estimated CPI rate of 4.6 percent in 2024-25 and 4.2 percent in 2025-26 due to improving supply chain capabilities in the country.
India's GDP is estimated to accelerate to USD 3.93 trillion in 2024-25 and USD 4.33 trillion in 2025-26, surpassing Japan and becoming the fourth largest economy. Furthermore, India is set to overtake Germany in 2027-28, solidifying its position as the third largest economy, with a GDP surpassing the USD 5 trillion mark.
This is as a result of the strong and effective policy dosages that have built steady strides for a strong futuristic growth trajectory. The post covid resilience of the economy has strengthened India’s growth trajectory to perform even in the adverse global economic environment vis-à-vis geo-political conflicts.
In a recent report by PHDCCI (PHD Chamber of Commerce and Industry) on Viksit Bharat@2047, India is estimated to become a USD 34.7 trillion economy by 2047. The per capita income is estimated to increase substantially, reaching USD 4,667 by 2030 and USD 21,000 by 2047.
The growth is expected to stimulate consumer demand, boost the industry sector, and spur private investments.
There will be substantial changes in the sectoral value added as the Indian economy undergoes structural transformations. The agriculture sector in India, contributing 20% to total GDP in 2023, is projected to contribute 12% to GDP by 2047. The industrial sector contribution to GDP is expected to reach to 34% by2047from a current level of 26%, according to PHDCCI recent report on Viksit Bharat@2047.
Within industry, PHDCCI report on Viksit Bharat@2047 projects manufacturing to contribute 25% to GDP by 2047 while the services sector contribution to GDP is expected to remain same at around 54%.
Despite global headwinds, India’s exports have shown remarkable resilience. Exports will show a significantmomentum in the coming years, accelerating to USD 2 trillion in 2030 and USD 10 trillion by 2047. Additionally, the contribution of exports to GDP is expected to rise from current level of 21 percent to 30 percent by 2047.
India is expected to become the 2nd largest Startup ecosystem in the World by 2030 supported by continued hand holding of the government. The government has introduced several industry-friendly policies to enable ease of doing business and reduce cost of doing business.
India improved its global ranking in the Logistics Performance Index to 38 in 2023 from 54 in 2014.The report on Viksit Bharat@2047 by PHDCCI projects, India will be among the top 5 countries by 2047 in the Logistics Performance Index.
Further, India is embracing the digital age with a surge in internet usage and Artificial Intelligence (AI) adoption. The internet usage is estimated to reach 82% by 2047 from a current level of 8%. Concurrently, India's rank on the Government AI Readiness Index has improved from 51 in 2021 to 40 in 2023, and PHDCCI’s report on Viksit Bharat@2047 projects to be among the top 5 by 2047.
The recent Asian Development Bank ‘April Outlook 2024’ consolidated India’s strong growth story. India grew robustly in 2022-23 at 7.6 percent as a result of growth in the manufacturing and services sector. The projections remain highly optimistic driven by public and private sector investment demand.
Moreover, according to the World Trade Organization's ‘Global Trade Outlook’ report from April 2024, India ranks 17th among the top 20 exporters in World merchandise trade for the year 2023. Additionally, India holds the 7th position in terms of the export of commercial services, solidifying its position as one of the top 10 exporters globally.
India has taken proactive measures to implement digital initiatives across various sectors, leading to a significant increase in the export of digitally delivered services from 2019 to 2023. India occupies a prominent place among top five exporters of digitally delivered services, highlighting its importance in the global market.
The recent World Bank's ‘South Asia Development Update’ report for April 2024 underlines that output growth in South Asia has exceeded expectations spearheaded by impressive economic expansion of India. India’s GDP is estimated to reach 7.5 percent in FY 2023-24, supported by a rapid increase in investment and government consumption. Inflation remained within the target range of 2–6 percent and is expected to subside.
India’s composite purchasing managers index (PMI) stood at 60.6, well above the global average of 52.1. A higher-than-global average composite purchasing manager’s index (PMI) shows robust growth in the manufacturing and services sectors. The growth in the services sector is spearheaded by strong growth in construction and real estate activity.
In conclusion, India's economic trajectory as projected by various national and international organizations paints a picture of robust growth and resilience in the coming years. The projections from institutions such as the IMF, World Bank, Asian Development Bank, World Trade Organization and PHDCCI all converge on the optimistic outlook for India's GDP expansion, per capita income rise, sectoral transformations, and global trade prominence.
Through proactive measures, strong consumption demand, bright investment prospects from both public capital expenditure and private investments and increasing digitalisation of the Indian economy, India is poised to carve out a prominent role in shaping the future of the world economy.
