India to become third-largest economy by 2030-31: S&P Global

Mumbai: India is on track to become the third-largest economy by 2030-31, driven by a robust projected annual growth rate of 6.7 per cent, S&P Global said on Thursday.

The S&P Global India Research Chapter’s inaugural study launched here said that India is on track to become the third largest economy by FY31.

This growth will be driven by a robust projected growth rate of 6.7 per cent, the study said, emphasising that the country has emerged as the fastest-growing large economy at an 8.2 per cent growth rate in FY24.

This significantly exceeds the government’s earlier estimate of 7.3 per cent.

Abhishek Tomar, Head- S&P Global India Leadership Council and Chief Data Officer for S&P Global Market Intelligence, said, “India’s medium-term prospects are healthy and filled with opportunities in multiple sectors including trade, agriculture, and AI, likely structural reforms and growing energy demands. India is poised for growth, and with a young and dynamic workforce well-positioned to shape the global economic landscape.”

The report said the continued reforms are crucial to improving business transactions and logistics, boosting private sector investment, and reducing reliance on public capital.

According to the report, nearly 90 per cent of the country’s trade is seaborne, necessitating robust port infrastructure to manage increasing exports and bulk commodity imports, it stated.

It also said that India faces rising domestic energy demands and can look to sustainable technologies, including renewables and low-emission fuels balancing energy security with its energy transition plans.

Agriculture will rely on advanced technologies and new policies to improve infrastructure and productivity, it emphasised.

The equity markets are expected to stay dynamic and competitive due to strong growth prospects and better regulation while foreign inflows into Indian government bonds have surged since the country joined major emerging market indexes, with further growth anticipated.

To maximize trade benefits, India must develop infrastructure and geopolitical strategies, particularly regarding its extensive coastline, it said.