India is on track to become the world’s third-largest economy by 2027, surpassing Japan and Germany, with a GDP of over $5 trillion, according to the finance ministry and the Reserve Bank of India. The country’s economic growth is driven by various factors, such as demographic dividend, institutional reforms, infrastructure development, digital transformation, and financial inclusion. India’s chief economic advisor, V Anantha Nageswaran, said the government’s goal is to become a developed country by 2047, with an inclusive and empowering growth for all citizens12.
India has achieved a consistent GDP growth rate of 7% or above in the last decade, despite the challenges posed by the COVID-19 pandemic and the global slowdown. The country has also emerged as the fifth largest equity market in the world, with a market cap of $4.5 trillion, and is expected to reach $10 trillion by 20303. India’s weight in global indices is still low at 1.6%, indicating a potential for further upside. India’s domestic demand, especially in private consumption and investment, has been robust, supported by the government’s measures such as direct benefit transfer, GST, bankruptcy reforms, RERA, and physical and digital infrastructure4.
India’s export outlook is also positive, as the country has become more competitive in the global market, thanks to its low-cost products, high-quality services, and innovation. India’s exports in February 2024 are set to reach the highest level in two years, driven by strong demand from Asian buyers, especially China, Bangladesh, and Vietnam5. India’s trade deficit has also narrowed, as the country has reduced its dependence on oil imports and increased its domestic production of renewable energy. India’s current account surplus in 2023/24 was the highest in 17 years, at 1.1% of GDP.
India’s financial sector has also witnessed significant development and innovation, with the growth of fintech, bank tech, and digital payments. India has become a global leader in digital transactions, with over 2 billion UPI transactions in January 2024, up from 1.3 billion in January 2023. India’s financial inclusion has also improved, with over 400 million Jan Dhan accounts, over 300 million Aadhaar-linked bank accounts, and over 200 million RuPay cards issued. With the expansion of NBFCs, MFIs, and P2P lending platforms, India’s credit growth has also picked up. India’s banking sector has also become more resilient, with the improvement in asset quality, capital adequacy, and governance.
India’s economic prospects are bright, as the country continues to pursue reforms and policies that enhance its productivity, competitiveness, and sustainability. India’s vision is to become a $30 trillion economy by 2047, with a per capita income of $20,000, and a human development index of 0.8. India’s growth story is not only about numbers but also about the well-being and empowerment of its 1.4 billion people. India is poised to become a global force for good, as it contributes to the world’s peace, security, and prosperity.