India Will Become Third-Largest Economy By 2027
By 2027, India will have the third-largest economy in the world thanks to a change in policy strategy that prioritizes expanding financing, demographic benefits, and public virtual infrastructure, according to a prediction by Morgan Stanley.
Additionally, it predicted that during the next ten years, India’s gross domestic product (GDP) will increase from its present level of $3.4 trillion to $8.5 trillion. According to Morgan Stanley’s leader Asia economist Chetan Ahya, “Incrementally, India will add more than $400 billion to its GDP each year, a scale that is easily passed by using the United States and China.”
According to him, the prediction is supported by a convergence of favorable domestic and international dynamics as well as a shift in the focus of policy from redistribution to fostering investment and job growth. As examples of changes in government policy, he cited tax reforms in the form of the Goods and Services Tax (GST), a decrease in the corporation tax rate, and the introduction of incentive programs related to manufacturing. India is becoming a more popular destination in a multipolar world where businesses are diversifying their supply chains, he said.
“India is entering a market where earnings have the potential to multiply quickly and on a large base. For comparison, it took India 31 years from 1991 and $three trillion to increase its GDP. Our estimates indicate that it will only take another seven years for the GDP to increase by utilizing an extra $3 trillion “He declared.
He also noted a distinction between India and other economies in terms of virtual infrastructure. While other economies have chosen to go the private network way, India has built a public virtual infrastructure that is entirely based on Aadhaar. He said that further layers are being built to use this virtual infrastructure to simplify company costs and better match consumers and organizations.
In this regard, he brought up the Open Network for Digital Commerce (ONDC), which is positioned as the e-commerce equivalent of UPI (unified pricing interface). According to Ahya, “the change in India’s policy approach is moving it toward the East Asian variant of leveraging exports, increasing savings, and recycling it for finance.” He used China as an example and said that, 15 years later, India’s GDP is equivalent to what China’s was in 2007.
However, he continued, India‘s population of working age is increasing, suggesting that the country would have a longer increase runway. These days, India’s median age is eleven years younger than China’s.
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