"India Poised to Surpass Japan as the World's Third-Largest Economy by 2030: S&P Global"
"India Poised to Surpass Japan as the World's Third-Largest Economy by 2030: S&P Global"
"India, currently the world's fifth-largest economy, is expected to surpass Japan and become the third-largest economy with a GDP of USD 7.3 trillion by 2030, according to S&P Global Market Intelligence in its latest PMI report. Following two years of rapid economic growth in 2021 and 2022, the Indian economy has maintained strong and sustained growth throughout 2023."
India's gross domestic product (GDP) is expected to grow by 6.2–6.3% in the fiscal year ending March 2024, maintaining its position as the fastest-growing major economy this fiscal year. Asia's third-largest economy recorded an impressive 7.8% growth in the April–June quarter.
"The near-term economic outlook is for continued rapid expansion during the remainder of 2023 and into 2024, driven by strong growth in domestic demand," S&P Global stated.
The acceleration of foreign direct investment (FDI) inflows into India over the past decade underscores the favorable long-term growth prospects for the Indian economy, bolstered by a youthful demographic and rapidly rising urban household incomes.
India's nominal GDP, measured in USD terms, is projected to rise from USD 3.5 trillion in 2022 to USD 7.3 trillion by 2030. This rapid economic expansion is set to make India's GDP larger than Japan's by 2030, positioning it as the second-largest economy in the Asia-Pacific region.
By 2022, India's GDP had already surpassed that of the UK and France. By 2030, it is forecast to exceed Germany's GDP as well.
Currently, the US is the world's largest economy with a GDP of USD 25.5 trillion, accounting for a quarter of global GDP. China is the second-largest with a GDP of about USD 18 trillion, or 17.9% of global GDP. Japan ranks third with a GDP of USD 4.2 trillion, followed by Germany at USD 4 trillion.
S&P Global highlighted several key drivers supporting India's long-term economic growth:
A Large and Growing Middle Class: India's expanding middle class is driving consumer spending. The growing domestic market and industrial sector have made India a significant investment destination across manufacturing, infrastructure, and services.
Digital Transformation: The ongoing digital transformation is expected to accelerate e-commerce growth, reshaping the retail consumer landscape. By 2030, 1.1 billion Indians are projected to have internet access, more than doubling the estimated 500 million internet users in 2020.
Home-Grown Unicorns and Technological Advances: The rapid adoption of 4G and 5G smartphone technology is fueling the growth of Indian unicorns like Mensa Brands, logistics startup Delhivery, and online grocer BigBasket, whose e-commerce sales surged during the pandemic.
Increased FDI Inflows: FDI inflows into India have shown strong momentum over the past five years, even during the pandemic (2020–2022). This trend reinforces India's status as a critical long-term growth market for multinationals across industries like autos, electronics, chemicals, banking, insurance, health care, and information technology.
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