Shifting goal posts for $5-trillion economy

Due to slower-than-expected nominal growth in dollar terms and steady weakness of the rupee, this objective may be achieved four years later than expected in FY25

- N CHANDRA MOHAN

DESPITE WEAKER-THAN-EXPECTED NOMINAL growth in gross domestic product (GDP) and depreciation of the rupee, there is no letup in aspirational objectives of pegging the size of the Indian economy in US dollar-denominated terms.

As the fifth-largest economy in the world, the narrative is that India is set to soon become the third-largest economy with a projected GDP of $7.3 trillion by 2030 and $30 trillion in 2047. However, becoming the fourth-largest economy by overtaking Japan has not happened as yet. India’s nominal GDP in April-September 2025 is $1.98 trillion as against Japan’s $2.13 trillion. This is due to the sharp decline of the rupee against the US currency unit that reduces the size of India’s dollar-denominated GDP.

While the latest GDP numbers indicate that the Indian economy is perhaps on track to hit $4 trillion this fiscal, they also strongly suggest that larger aspirational hopes may take a tad longer to be fulfilled. Look no further than the still-to-be-fulfilled ambition to become a $5-trillion economy, a hope that still burns bright among the ruling dispensation’s policymakers. This goal was first articulated by Prime Minister Narendra Modi in his Independence Day address after he secured a second term in 2019. In a first of sorts, the maiden Budget of Union Finance Minister Nirmala Sitharaman and the Economic Survey for 2018-19 shared this explicit vision statement to become a $5-trillion economy by FY25 from $2.83 trillion in FY20.