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BENGALURU: India will remain the fastest-growing major economy for at least the next three years, setting it on course to become the world’s third-largest economy by 2030, S&P Global Ratings said in a report.

S&P expects India, currently the world’s fifth-largest economy, to grow at 6.4% this fiscal and estimates growth will pick up to 7% by fiscal 2027.

In contrast, it expects China’s growth to slow to 4.6% by 2026 from an estimated 5.4% this year.

India’s gross domestic product (GDP) grew a bigger-than-expected 7.6% in the second quarter of fiscal 2024, data showed last week, which prompted several brokerages to raise their full-year estimate.

However, S&P, which had raised its forecast even before the latest data, said that India’s growth will depend on its successful transition to a manufacturing-dominated economy from a services-dominated one.

“A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity,” S&P said in its Global Credit Outlook 2024 report, dated Dec. 4.

India’s Nifty, Sensex touch new highs on key wins for the BJP

While Prime Minister Narendra Modi’s government has been driving domestic manufacturing through the ‘Make in India’ campaign and production-linked incentives (PLIs), the share of manufacturing is still roughly 18% of GDP.

In contrast, services account for over half of India’s GDP.

S&P said that developing a strong logistics framework is key to becoming a manufacturing hub and that India also needs to “upskill” its workers and increase female participation in the workforce to realize its “demographic dividend.”

It is India’s time on the global stage; Pakistan is nowhere near it

India has one of the youngest working populations in the world, with nearly 53% of its citizens under the age of 30.

Comments

200 characters
mustafa Dec 05, 2023 07:00pm
GDP per capita and life quality matters HDI ( Human development Index ).... these numbers are just to create hype - nothing more P.s :- 100 rupees in pocket of 100 people VS 10,000 rupees with one man ( obviously in real - one man with 10,000 is richer and can afford better life)
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Raj K Dec 05, 2023 11:20pm
@mustafa, By your logic Pakistan with 1/6th population of India should have 1/6 GDP of India's GDP which would be 622 billion $ (3732/6), but Pak GDP is barely half of 622 B$ :)) The truth is nominal GDP does matter (which you find difficult to digest:). A country becomes more influential on world stage. Much larger population, much diverse country has managed to improve HDI, it has been a slow process but larger economic pie does help. That's where free rations for 80 cr people comes from.
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TimetoMoVVeOn Dec 05, 2023 11:22pm
@mustafa, so what do we suggest we do? Follow your Pakistan model. Look we are at least growing and hope that the total growth will start to trickle down.
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Fatima Dec 06, 2023 01:08am
@mustafa, yes we are happy being where we are everyone equally poor, except for the elites , government and military
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Kashif ALI Dec 06, 2023 01:17am
Point to note for Pakistan is that Bigger economies grow only by becoming a Manufacturing-oriented Economy. Services-oriented economy will not let it cross that barrier. I wish Pakistan's economy were more open to the World.
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Arun Dec 08, 2023 10:43pm
@mustafa, Rich and poor people are found in all countries. However, a huge population base ensures that a few billionaires cannot distort the overall picture of per capita GDP in India.
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