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India set to become world’s third-largest economy by 2030: S&P Global

India is currently the fifth largest economy behind the US, China, Germany, and Japan

India set to become world’s third-largest economy by 2030: S&P Global
[Source photo: Chetan Jha/Press Insider]

India is poised to become the world’s third-largest economy by 2030 and will remain the fastest-growing major economy for at least the next three years, S&P Global Ratings said in a report.

India, with $3.7 trillion economy, is currently the fifth largest behind the US ($27 trillion), China ($17.7 trillion), Germany ($4.4 trillion), and Japan ($4.2 trillion), according to the International Monetary Fund (IMF) data. 

By current estimates, India will surpass Germany and Japan by 2030. 

S&P estimates that India will grow at 6.4% this fiscal year and will record a growth of 7% by fiscal 2027. The ratings agency said China will slow to 4.6% in 2024, slightly rise to 4.8% in 2025, and return to 4.6% in 2026.

In the recently released data, the government said that India’s real GDP grew 7.6% YoY in the quarter ended October. S&P expects India to grow at 6.4% during the current fiscal. 

“India is set to become the third-largest economy by 2030, and we expect it will be the fastest growing major economy in the next three years,” S&P said in its Global Credit Outlook 2024 released on Monday. 

A paramount test, however, will be whether India can become the next big global manufacturing hub, the ratings agency said. 

“Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one. Unlocking the labor market potential will largely depend upon upskilling workers and increasing female participation in the workforce,” it said. 

“Success in these two areas will enable India to realize its demographic dividend. A booming domestic digital market could also fuel expansion in India’s high-growth startup ecosystem during the next decade, especially in financial and consumer technology. In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation,” it added.

Prime Minister Narendra Modi has repeatedly said that India will soon become the third-largest economy in the world. 

“On the basis of track record, in the third term of our government, India will become the world’s third-largest economy. This is Modi’s guarantee,” Modi said at a public event in July. 

India goes to elections next year with Prime Minister Modi looking for a third term (2024-2029) in office.

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