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With expanding consumer market and a large industrial sector, Indian economy is set to surpass Japan and Germany by 2030, S&P Global Market Intelligence has said in its latest commentary.
At present, India is ranked fifth in terms of the size of its economy at $3.7 trillion in 2023-24.
“India‘s nominal GDP measured in USD terms is forecast to rise from $3.5 trillion in 2022 to $7.3 trillion by 2030. This rapid pace of economic expansion would result in the size of the Indian GDP exceeding Japanese GDP by 2030, making India the second largest economy in the Asia-Pacific region.,” ’the agency said in Economics Commentary, authored by Rajiv Biswas, Asia Pacific Chief Economist with S&P Global Market Intelligence. By 2030, India’s GDP is also forecast to surpass Germany, the report added. China is the largest economy in Asia.
In expansion mode
Further, the agency while noting rapid economic growth in 2021 and 2022, said sustained economic growth is being seen in current calendar year (2023) The near-term economic outlook is for continued rapid expansion during the remainder of 2023 and for 2024, underpinned by strong growth in domestic demand, it said.
These remarks support the confidence expressed by Prime Minister Narendra Modi who has repeatedly said that India will soon be the third largest economy in the world. Last month, in his address at 20 Years’ Celebration of Vibrant Gujarat Global Summit, he said: “Now we are standing at a turning point where Bharat is going to become a global economic powerhouse. Now this is Bharat’s guarantee to the world and my guarantee to you too. You will see before your eyes; within a few years Bharat will be among the top 3 largest economies of the world. This is Modi’s guarantee.”
Betting big on India
According to S&P Global Market Intelligence, India will continue to be one of the world’s fastest growing economies over the next decade. This will make India one of the most important long-term growth markets for multinationals in a wide range of industries, including manufacturing industries such as autos, electronics and chemicals to services industries such as banking, insurance, asset management, healthcare and information technology.
It also said that by 2030, 1.1 billion Indians will have internet access, more than double from the estimated 500 million internet users in 2020. The rapid growth of e-commerce and the shift to 4G and 5G smartphone technology will boost home-grown unicorns like online e-commerce platform Mensa Brands, logistics start-up Delhivery and the fast-growing online grocer BigBasket, whose e-sales have surged during the pandemic.
Growth drivers
The agency listed many growth drivers supporting long term outlook. “An important positive factor for India is its large and fast-growing middle class, which is helping drive consumer spending. The rapidly growing Indian domestic consumer market as well as its large industrial sector has made India an increasingly important investment destination for a wide range of multinationals in many sectors, including manufacturing, infrastructure and services,” it said.
It also highlighted that the digital transformation of India that is currently underway is expected to accelerate the growth of e-commerce, changing the retail consumer market landscape over the next decade. This is attracting leading global multinationals in technology and e-commerce to the Indian market, the agency added.
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