How India is expected to surpass Japan to become 2nd largest Asian economy by 2030 – Times of India

India is projected to surpass Japan and become the world’s third-largest economy by 2030, according to a report by S&P Global Market Intelligence. According to PTI, the report states that India’s GDP is expected to reach $7.3 trillion by 2030, making it the world’s third-largest economy. The Indian economy has shown strong growth in recent years, with a projected GDP growth of 6.2-6.3% in the fiscal year ending in March 2024.
India’s rapid economic expansion is driven by strong domestic demand and increased foreign direct investment inflows. According to S&P, the surge in foreign direct investment entering India in the last decade mirrors the positive long-term economic growth prospects for the country. This is supported by a youthful demographic structure and the swift increase in urban household incomes.
India’s nominal GDP, measured in USD terms, is predicted to grow from $3.5 trillion in 2022 to $7.3 trillion by 2030. This rapid expansion is expected to propel India’s GDP ahead of Japan’s, making it the second-largest economy in the Asia-Pacific region by 2030. Already, India’s GDP surpassed that of the UK and France by 2022 and is forecast to exceed Germany’s by 2030.
Currently, the United States maintains the world’s largest economy with a GDP of $25.5 trillion, accounting for a quarter of the world’s GDP. China is the second-largest economy, with a GDP of around $18 trillion, constituting nearly 17.9% of the global GDP. Japan ranks third with a GDP of $4.2 trillion, followed by Germany with $4 trillion.
S&P Global highlights several key drivers supporting India’s long-term economic prospects, including its large and rapidly growing middle class, driving consumer spending. India’s expanding domestic consumer market and substantial industrial sector have made it an increasingly attractive investment destination for various multinational corporations in sectors like manufacturing, infrastructure, and services, it says.
The ongoing digital transformation in India is anticipated to accelerate e-commerce growth and reshape the retail consumer market over the next decade. This transformation has attracted leading global technology and e-commerce multinationals to the Indian market.
S&P Global projects that by 2030, more than 1.1 billion Indians will have internet access, more than doubling from the estimated 500 million internet users in 2020. This rapid growth in e-commerce, along with advancements in 4G and 5G smartphone technology, is expected to benefit homegrown unicorn companies such as Mensa Brands (online e-commerce), Delhivery (logistics startup), and BigBasket (online grocer).
India has witnessed a significant increase in foreign direct investment over the past five years, with this momentum continuing even during the pandemic years of 2020-2022. Notably, large investments from global technology giants like Google and Facebook have contributed to this trend drawn by India’s substantial and fast-growing domestic consumer market. There has also been a strong upturn in foreign direct investment inflows from manufacturing firms.
Overall, India is poised to remain one of the world’s fastest-growing economies over the next decade, making it a crucial long-term growth market for multinational companies across various industries, including manufacturing, electronics, chemicals, banking, insurance, asset management, healthcare, and information technology, says S&P.

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