THE PUSH AND PULL OF INDIA'S ECONOMIC RISE

Led by reform, demographics, and digital ambition, India edges towards global prominence - challenged by the need for inclusive, sustainable growth

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India is poised to become the third-largest economy in the world by 2027-28, surpassing Japan and Germany in nominal GDP. This milestone is symbolic and reflects a structural shift in the global economic order. With its expanding population, rapidly growing domestic market, strong digital infrastructure, and economic reforms, India stands at a critical inflexion point. According to the IMF and other institutions, its GDP is projected to reach $5.2 trillion by FY27-28, up from $4.27 trillion in 2025.

Strong fundamentals underpin this projected growth. In FY23-24, India posted a real GDP growth rate of 8.2%, one of the highest among major economies. Although this is expected to moderate to 6.5% in FY24-25, quarterly indicators remain strong - Q4 FY24 alone saw a 7.4% jump, driven primarily by rural demand and a resilient farm sector.

The World Bank and IMF project India’s growth to stabilize at around 6.2%-6.3% through 2026. These figures make India a regional powerhouse and a vital contributor to global growth, accounting for nearly 16% of global economic expansion in 2023.

India’s economic ascent can be traced to a blend of policy reform, domestic demand, and external tailwinds. The economic liberalization of the 1990s set the stage. Still, it is the reforms of the last decade - such as the Goods and Services Tax (GST), digital identification (Aadhaar), the Unified Payments Interface (UPI), and the Make in India initiative - that have accelerated the country’s progress. These policy instruments have expanded the tax base, improved governance, enhanced ease of doing business, and empowered millions through financial inclusion.