S&P Global Ratings predicts India to become the world's third-largest economy by 2030, emphasizing the challenge of unlocking its manufacturing potential. The agency forecasts India as the fastest-growing major economy over the next three years, expecting a GDP growth of 7% by 2026, up from the current 6.4% projection.
In the fiscal year 2022-23, India's GDP grew by 7.2%, with robust expansions of 7.8% and 7.6% in the June and September quarters, respectively. S&P highlights India's opportunity to transition into a manufacturing powerhouse, emphasizing the need for a robust logistics framework.
With a GDP of USD 3.73 trillion, India currently stands as the fifth-largest economy globally. The IMF projects India to reach a USD 5 trillion economy, securing the third-largest GDP by 2027-28.
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S&P emphasizes the importance of upskilling the workforce and increasing female participation to unlock India's labor market potential. The agency also sees potential growth in India's startup ecosystem, especially in financial and consumer technology, fueled by a thriving domestic digital market.
Moreover, S&P notes global geopolitical factors, including elections in over 50 countries, and the ongoing conflicts in regions like Russia-Ukraine and the Middle East. Elections in various emerging markets, including India, pose potential risks due to low policy predictability, impacting investor sentiment and existing investment potential.
The agency advises that enhancing policy visibility will be crucial for attracting investments and capitalizing on emerging market opportunities.