India poised to become Asia's second-largest economy surpassing Japan by 2030: S&P Global 

S&P Global Market Intelligence has forecasted that India, currently the world's fifth-largest economy, is on track to surpass Japan and become the world's third-largest economy with a projected GDP of USD 7.3 trillion by 2030.This optimistic projection is based on India's economic growth in the years 2021 and 2022, which has continued to show strong momentum throughout 2023.

For the fiscal year ending in March 2024, India's GDP is expected to grow between 6.2 per cent and 6.3 per cent, positioning it as the fastest-growing major economy during this fiscal year. Notably,India's economy surged by 7.8 per cent in the April-June quarter. S&P Global Market Intelligence anticipates that this expansion will persist throughout the remainder of 2023 and 2024, underpinned by significant growth in domestic demand.

The accelerated inflow of foreign direct investment (FDI) into India over the past decade aligns with the favourable long-term growth outlook for the Indian economy. India's youthful demographic profile and rapidly rising urban household incomes contribute to this optimistic projection. "India's nominal GDP measured in USD terms is forecast to rise from USD 3.5 trillion in 2022 to USD 7.3 trillion by 2030," S&P Global said in its report. This surge would result in India's GDP surpassing Japan's by 2030, making it the second-largest economy in the Asia-Pacific region.

By 2022, India's GDP had already surpassed that of the UK and France, and by 2030, it is expected to surpass Germany as well. The current global economic landscape is led by the United States, with a GDP of USD 25.5 trillion, making up a quarter of the world's GDP. China follows as the second-largest economy with a GDP of approximately USD 18 trillion. Japan, with a GDP of USD 4.2 trillion, currently holds the third position, followed by Germany with a GDP of USD 4 trillion.

S&P Global underlined key growth drivers that support India's long-term economic outlook. The country's large and rapidly growing middle class plays a significant role in driving consumer spending. Furthermore, India's domestic consumer market, combined with its industrial sector, has attracted a wide range of multinational companies across various sectors, including manufacturing, infrastructure, and services.

The ongoing digital transformation in India is also expected to accelerate e-commerce growth, reshaping the retail consumer market landscape over the next decade. This transformation has drawn leading global multinationals in technology and e-commerce to India. By 2030, it is projected that 1.1 billion Indians will have internet access, more than doubling the estimated 500 million internet users in 2020.

India's surge in FDI inflows, particularly from global technology giants like Google and Facebook, has played a pivotal role in its economic growth. The country's large and rapidly expanding domestic consumer market is a key attraction for these investments. Even during the pandemic years of 2020-2022, India continued to experience strong momentum in FDI inflows, notably from manufacturing firms.

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