India is projected to drive global economic growth

India is on track to become the world’s third largest economy by 2027, edging past Japan and Germany, says a new Morgan Stanley research report. India will account for a fifth of total global economic growth in the next decade.

- Tushar K Mahanti

The expanding volume and the vast scale of India’s economy will be the key driver of this surge, the global investment bank has added. The report titled ‘Why This is India’s Decade’ underlines the trends and policies driving the future of the country’s economy.

According to the report, India's GDP is set to double from the current $3.4 trillion to $8.5 trillion over the next decade. "India will add more than $400 billion to its GDP every year, a scale that is only surpassed by the US and China," the report claimed.

India is already the fastest-growing economy in the world, having grown at an average 5.5% over the past decade. India’s real GDP growth will average 6.5% in the coming decade while China’s will average 3.6%, the report has said. Four major trends— demographics, digitalization, decarbonization and deglobalization — are likely to facilitate India's rapid rise.

The growth will have a further boost with Indian consumers having more disposable income. India’s income distribution could flip over the next decade, and consequently overall consumption in the country could more than double from $2 trillion in 2022 to $4.9 trillion by the end of the decade. The biggest gainers of this consumption expansion will be nongrocery retail including apparel and accessories, leisure and recreation and household goods and services.

India is the fastest growing major economy