India is set to become the world’s third-largest economy by 2028, as per a report by global financial services firm Morgan Stanley. This growth is driven by macroeconomic stability, an expanding consumer market, and robust improvements in infrastructure.
Report Highlights
India’s Past Economic Rankings:
- 1990: 12th largest economy
- 2000: 13th largest economy
- 2020: 9th largest economy
- 2023: 5th largest economy
Growth Projections:
- 2023 Economy: USD 3.5 trillion
- 2026 Projection: USD 4.7 trillion (fourth largest globally, behind the US, China, and Germany)
- 2028 Projection: USD 5.7 trillion (overtaking Germany)
Global GDP Share Forecast:
- To Increase from 3.5% in 2023 to 4.5% by 2029
Growth Scenarios (By 2035):
- Bear Case: GDP grows from USD 3.65 trillion (2025) to USD 6.6 trillion
- Base Case: GDP reaches USD 8.8 trillion
- Bull Case: GDP accelerates to USD 10.3 trillion
GDP Per Capita Projections for 2035:
- Bear Scenario: USD 4,247
- Base Scenario: USD 5,683
- Bull Scenario: USD 6,706
Key Drivers Behind India’s Economic Momentum
- Demographic Advantage: A growing workforce and an expanding middle class that fuels consumption.
- Policy Reforms: Macroeconomic stability resulting from proactive fiscal and monetary policies.
- Infrastructure Development: Enhanced transport, digital connectivity, and logistics that boost productivity.
- Manufacturing and Services: Growth in both sectors contributing significantly to GDP output.
- Financial Inclusion: Expanding credit access and increased private investments.
- Governance and Social Outcomes: Functioning democracy, a rising entrepreneurial class, and improving social conditions.
Implications of Report
- Consumer Market: India is set to become the world’s most sought-after consumer market, attracting global businesses and investments.
- Energy Transition: A major shift in the energy sector is anticipated, supporting sustainable growth.
- Credit and Manufacturing: Increased credit-to-GDP ratio and strengthened manufacturing contributions will further elevate the economy.