S&P Global predicted in a recent analysis that India will become the world’s third-largest economy by 2030 if its annual nominal GDP growth rate averages 6.3%, according to CNBC on the 1st (local time).
Morgan Stanley, a major investment bank (IB), predicts that India’s GDP would more than double by 2031 because “India is offshore (relocating production facilities overseas), manufacturing investment, energy conversion, advanced technology.” He noted that infrastructure supports economic growth. Morgan Stanley said, “This driving force would make India the world’s third-largest economy and stock market within 10 years.”
India’s third-quarter GDP growth was 6.3 percent, exceeding Reuters experts’ expectations of 6.2 percent. Services and domestic demand boosted India’s second-quarter GDP growth to 13.5%.
The Indian government is trying to make India a manufacturing and foreign investment powerhouse. India’s economic growth depends on continuing investment in trade and financial liberalization, labor market reforms, infrastructure, and human capital, according to Standard & Poor’s.
“India’s assets are its low-cost labor force, cheap manufacturing prices, openness to investment, business-friendly regulations and young population,” EIU analyst Sumedha Dasgupta told CNBC.
“Multinational corporations are more optimistic than ever about investing in India,” Morgan Stanley stated. “The Indian government is encouraging investment through infrastructure construction and availability of factory land.”
Indian economic optimism is not limited. Trade-dependent India is projected to suffer from macro risks like a global recession. Unskilled labor, geopolitical concerns, and political missteps also contributed to Indian economic volatility.
Sonal Bama, Nomura’s top economist, predicted less growth in India. He noted.
Bloomberg News estimated India’s nominal GDP, reflecting inflation in the first quarter of this year (January–March), at $854.7 billion based on IMF GDP data and exchange rates. It ranks fifth, surpassing the UK’s $816 billion (roughly 1112.21 trillion won). As of 2021, the US has the world’s GDP ($22.9961 trillion). China ($17.734 trillion) was second, followed by Japan ($4.9374 trillion) and Germany ($4.2231 trillion). India was sixth, behind the UK ($3.1869 trillion).
