India now 5th largest economy

Year 2022 witnessed India becoming 5th largest economy ($3.5trn) beating the UK ($3.2trn) and is now behind the US, China, Japan and Germany. With $2-trillion economy, India was world's 10th largest economy in 2014.

India is poised to surpass Japan and Germany to become the world's third-largest economy mostly by 2030, predicts S&P Global and Morgan Stanley. S&P's forecast is based on the projection that India's annual nominal gross domestic product growth will average 6.3% through 2030. Similarly, Morgan Stanley estimates that India's GDP is likely to more than double from current level by 2031.

However, GDP Vs population holds the key. India has 1.4 billion population when compared with the UK with 0.068 billion. It's a huge difference. Hence, per capita GDP in India is at $2,500 as against $47,000 in the UK. Considering the current situation, it's a distant dream for India to match any country in top-5 club in terms of per capita GDP. We have miles to go. India recorded a y-o-y growth of 6.3 per cent for September-ended second quarter (Q2), higher than analysts' forecast of 6.2 per cent. Prior to this, India recorded an expansion of 13.5 per cent for the April to June compared to a year ago, buoyed by robust domestic demand in the country's service sector.

India clocked a record 20.1 per cent y-o-y growth in June qtr of 2021. What's contributing to Indian economy? Mostly, offshoring projects, investments in manufacturing, the energy transition, and advanced digital infrastructure as these sectors will make India the world's third-largest economy and stock market by 2030.

ADB, Fitch, Moody's retained 7 per cent GDP growth rate for India in FY23 and expected to grow at 7.2 per cent in FY24.

However, S&P retains India GDP growth rate of 7.3 per cent for FY23 attributing reason to small impact of global slowdown on the country. World Bank marginally increased its GDP forecast to 6.9 per cent from 6.5 per cent for FY23. Earlier, WB slashed growth prediction from 7.5 per cent to 6.5 per cent.