India is expected to overtake Japan as Asia’s second-largest economy by 2030, while its GDP is also expected to overtake that of Germany and the United Kingdom to rank third in the world, IHS Markit said in a report on Friday.
Currently, India is the sixth largest economy in the world, behind the United States, China, Japan, Germany and the United Kingdom.
“India’s nominal GDP measured in US dollars is expected to increase from US $ 2.7 trillion in 2021 to US $ 8.4 trillion by 2030,” said IHS Markit Ltd. “This rapid pace of economic expansion would translate into a size of India’s GDP exceeding Japan’s GDP by 2030, making India the second-largest economy in the Asia-Pacific region.”
By 2030, India’s economy would also be larger than the largest economies in Western Europe, Germany, France and the UK.
“Overall, India is expected to continue to be one of the fastest growing economies in the world over the next decade,” he said.
The long-term outlook for the Indian economy is supported by a number of key growth drivers.
“An important positive factor for India is its large and rapidly growing middle class, which is helping to boost consumer spending,” IHS Markit said, predicting that the country’s consumer spending would double from 1.5 trillion to $ 1.5 trillion. dollars in 2020 to $ 3 trillion. by 2030.
For the full year 2021-2022 (April 2021 to March 2022), India’s real GDP growth rate is expected to be 8.2%, rebounding from the sharp contraction of 7.3% year-on-year annual in 2020-2021, IHS Markit mentioned.
The Indian economy is expected to continue to grow strongly in fiscal year 2022-2023, at a pace of 6.7%.
The rapidly growing domestic consumer market along with its large industrial sector has made India an increasingly important investment destination for a wide range of multinationals across many sectors including manufacturing, infrastructure and services. .
India’s digital transformation that is currently underway is expected to accelerate the growth of e-commerce, changing the landscape of the consumer retail market over the next decade.
“This is attracting the world’s leading technology and e-commerce multinationals to the Indian market,” according to the report. “By 2030, 1.1 billion Indians will have access to the Internet, more than double the estimated 500 million Internet users in 2020.”
The rapid growth of e-commerce and the switch to 4G and 5G smartphone technology will boost local unicorns like online e-commerce platform Mensa Brands, logistics start-up Delhivery and the fast-growing online grocer. BigBasket, whose online sales increased during the pandemic, said IHS Markit.
“The strong increase in FDI inflows to India that has been evident over the past five years also continues with strong momentum in 2020 and 2021,” he said.
This, he said, is being spurred by large inflows of investment from global tech multinationals such as Google and Facebook which are drawn to India’s large domestic consumer market.
Being one of the fastest growing economies in the world will make India one of the most important long-term growth markets for multinationals across a wide range of industries, including manufacturing industries such as automotive, electronics and chemicals; and service industries such as banking, insurance, asset management, healthcare, and information technology.