A Decade of Unprecedented Growth

India's rise today resembles China's path. And this decade will prove to be crucial in determining India's growth trajectory. It only needs to play to its strengths

- ZARIN DARUWALA

INDIA TOOK 60 YEARS to become a $1-trillion economy in 2007, reaching $2.7 trillion by 2018. In the decade spanning 2018 to 2028 it is poised to witness a remarkable transformation, with a projected doubling of its nominal GDP to $5.94 trillion by 2028, becoming the third-largest economy in the world. This translates to creating and adding one "new" India to the current one, presenting an unparalleled opportunity for investors and businesses to join this burgeoning economic miracle.

Intrinsic to this is the pace of growth. By compounding at a high rate on a large base means that India is one of only three economies in the world that can generate more than $400 billion in annual economic output, which will rise to more than $500 billion from 2028. India's rise today resembles China's path over 2007-2011 when its nominal GDP grew from $3.55 trillion to $7.55 trillion, although at a slower pace.

Government Infrastructure Spending

Central to this growth story lies the government's strategic infrastructure spending, where central government capex has been increasing at a CAGR of 27% over the past five years. This strategic investment is a catalyst, effectively "crowding in" private capital expenditure. As infrastructure improves, businesses gain greater confidence in expanding their operations, leading to a virtuous cycle of investment and growth. Historical analysis shows that the railways have a multiplier effect of five times, with the road sector offering a similar opportunity in terms of growth gains.

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