India needs a vibrant four-year roadmap to enter top three economies league

In a big boost to India's global ambitions, the economy will soon be among the world's top three, if one goes by the latest projection by the State Bank of India (SBI). According to SBI's latest ecowrap, India is likely to touch this milestone by 2027-28. This is based on the economic reforms being implemented since 2014 and effective consolidation thereof.

India is already the world’s fastest-growing economy, having clocked 5.5% average gross domestic product growth over the past decade. Now, three megatrends—global offshoring, digitalization and energy transition—are setting the scene for unprecedented economic growth in the world’s most populous country.

All said and done, India’s GDP could more than double from the current $3.5 trillion to surpass $7.5 trillion by 2031. Its share of global exports could also double over that period, while the Bombay Stock Exchange (BSE) could deliver 11% annual growth, reaching a market capitalization of $10 trillion in the coming decade.

Companies around the world have been outsourcing services such as software development, customer service and business process outsourcing to India since the early days of the Internet. However, the present tighter global labor markets and the emergence of distributed work models are bringing new momentum to the idea of India as the back office to the world. The number of people employed in India for jobs outside the country is likely to at least double, reaching more than 11 million, as global spending on outsourcing swells from $180 billion per year to around $500 billion by 2030.

Multinational corporations’ sentiment on the investment outlook in India is at an all-time high. Manufacturing’s share of GDP in India could increase from 15.6% to 21% by 2031—and, in the process, double the country’s share in the export market. India began laying the foundation for a more digital economy with the launch of its unique national identification program called Aadhar.

Several economists and government officials have predicted that India, which is now the fifth largest economy, will become the third largest economy by 2027. This is based on strong economic growth in recent years, as well as its large and young population. However, there are some challenges that need to be overcome in order to achieve this goal, such as poverty, inequality, and infrastructure bottlenecks. Overall, the economy’s outlook is positive and becoming a major economic power in the coming years is imminently possible. The IMF has forecast that India's economy will grow by 8.2% in 2023, which would be the fastest growth rate among major economies. That apart, the country is steadily improving its infrastructure, by way of investments in roads, railways, and airports.

India’s growth has been so fast, and consistent, that some experts believe that India could even surpass Japan to become the second-largest economy by 2050. There are a number of factors that are driving this economic growth. These include a young and growing population, a large and growing middle class, a rapidly expanding manufacturing sector and a vibrant services sector. India is gradually emerging as a major player in the global economy and its trade relations are expanding.

Of course, there are also some challenges that India will need to overcome in order to achieve its economic goals. These include high levels of poverty, inequality, and corruption. Improving infrastructure and the education system are paramount to sustain the economic growth.

Despite these challenges, there is a strong belief that India is on the right track to become a major economic power in the coming decades.