India is poised to outstrip Japan as the world's third-largest economy by 2030, according to S&P Global Market Intelligence. The Indian economy, currently the fifth-largest globally, is projected to reach a GDP of USD7.3 trillion by 2030. Recent years have seen India experience substantial economic growth, with expectations of a 6.2-6.3% GDP increase in the fiscal year ending in March 2024. In the April-June quarter, India's GDP surged by 7.8%, solidifying its economic strength.
S&P Global anticipates continued robust expansion throughout 2023 and 2024, primarily driven by strong domestic demand. The influx of foreign direct investment over the past decade underscores the nation's favorable long-term prospects, buoyed by a youthful population and rising urban household incomes.
India's nominal GDP, measured in USD, is predicted to climb from USD3.5 trillion in 2022 to USD7.3 trillion by 2030, overtaking Japan and establishing India as the second-largest economy in the Asia-Pacific region. By 2022, India had already surpassed the UK and France in GDP, and it is projected to outpace Germany by 2030.
Currently, the United States holds the position of the world's largest economy, with a GDP of USD 25.5 trillion, comprising a quarter of global GDP. China follows as the second-largest economy, boasting a GDP of approximately USD18 trillion, equating to 17.9% of the world GDP. Japan lags behind in third place with a USD4.2 trillion GDP, and Germany is the fourth-largest with a USD4 trillion GDP.
S&P Global attributes India's long-term economic outlook to several key growth drivers. A burgeoning middle class and robust consumer spending are pivotal, as is the substantial industrial sector, making India an appealing destination for multinational investments in various sectors, including manufacturing, infrastructure, and services.
India's ongoing digital transformation is set to accelerate e-commerce growth, reshaping the retail landscape. Leading global tech and e-commerce companies are increasingly drawn to the Indian market.
By 2030, an estimated 1.1 billion Indians are expected to have internet access, more than doubling from 500 million users in 2020. This digital expansion is poised to benefit home-grown unicorns like Mensa Brands, Delhivery, and BigBasket.
India's strong FDI inflows have continued, propelled by investments from global technology giants like Google and Facebook. These firms are enticed by India's sizable and fast-growing consumer market, alongside growing FDI inflows from the manufacturing sector.
India is positioned to remain one of the world's fastest-growing economies in the coming decade, presenting a vital long-term growth market for multinationals across various industries, from manufacturing to services, including banking, insurance, asset management, healthcare, and information technology.
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