According to S&P Global Market Intelligence’s most recent issue of PMI, India, the fifth-largest economy in the world, is anticipated to pass Japan and become the third-largest economy in the world by 2030 with a GDP of USD 7.3 trillion.
The Indian economy showed two consecutive years of strong, sustained growth in 2021 and 2022, and it has continued to do so in 2023.
The fastest-growing global economy in this fiscal year is likely to be India, whose gross domestic product (GDP) is predicted to increase by 6.2–6.3% in the fiscal year that ends in March 2024. The third-largest economy in Asia experienced an incredible 7.8% growth in the April-June quarter.
According to S&P Global, the economy will continue to grow quickly through the end of 2023 and into 2024, supported by a substantial rise in domestic demand.
The recent acceleration of FDI into India is a reflection of the country’s favorable long-term growth prospects, which are supported by a youthful population profile and fast expanding urban household incomes.
“It is anticipated that India’s nominal GDP, expressed in USD, will increase from USD 3.5 trillion in 2022 to USD 7.3 trillion in 2030. By 2030, the size of the Indian GDP would surpass that of Japan due to the country’s strong economic growth, making India the second-largest economy in the Asia-Pacific region, according to the report.
By 2022, the Indian GDP was already larger than the GDPs of France and the UK combined. India’s GDP is anticipated to exceed Germany by 2030.
With a GDP of USD 25.5 trillion, the US has the greatest economy in the world right now. It covers one-fourth of global GDP. China is the second-largest economy in the world, with a GDP of over US$18 trillion, or roughly 17.9% of the global GDP. Germany comes in second with a GDP of USD 4 trillion, much behind Japan in third place with USD 4.2 trillion.
The long-term forecast for the Indian economy, according to S&P Global, is underpinned by a number of important growth factors.
“India’s sizable and rapidly expanding middle class, which helps in boosting consumer expenditure, is a significant positive aspect. India is becoming an increasingly important investment destination for a wide range of multinationals in several industries, including manufacturing, infrastructure, and services, according to the report. This is due to the country’s rapidly expanding domestic consumer market as well as its sizable industrial sector.
The landscape of the retail consumer industry is anticipated to change over the next ten years as a result of India’s ongoing digital revolution. Leading international multinationals in technology and e-commerce are being attracted to the Indian market as a result, according to S&P Global.
According to the report, more than double the predicted 500 million internet users in 2020-1.1 billion Indians—will have access to the internet by the year 2030. “Home-grown unicorns like online e-commerce platform Mensa Brands, logistics company Delivery, and the fast-growing online supermarket BigBasket, whose e-sales have risen during the pandemic, will benefit from the rapid expansion of e-commerce and the transition to 4G and 5G smartphone technologies.
Even during the pandemic years of 2020–2022, the significant increase in FDI inflows to India that has been visible over the previous five years is still going strong.
According to the report, “India’s strong inflows of FDI have been boosted by large inflows of investments from global technology MNCs like Google and Facebook that are drawn to India’s large, rapidly expanding domestic consumer market, as well as a strong upturn in foreign direct investment inflows from manufacturing firms.”
Over the next ten years, India’s economy is anticipated to continue to develop at one of the quickest growth rates in the world.
India will become one of the most significant long-term growth markets for multinationals in a number of industries, from manufacturing sectors like automobiles, electronics, and chemicals to services sectors like banking, insurance, asset management, healthcare, and information technology.