India To Become World's Third Largest Economy By 2030: S&P Global Ratings

India is set to become the third largest economy in the world by 2030, said the S&P Global Ratings in its latest report released on Tuesday. As per the report, the country's GDP growth would be around 7% in the 2026-27 fiscal year.

This would mean that India will surpass Japan and Germany. India is currently the world's fifth-largest economy after the US, China, Germany and Japan.

In its "Global Credit Outlook 2024", S&P said that India will remain the fastest-growing major economy for at least the next three years. However, it is still a paramount test if the country will become the next big global manufacturing hub.

The rating agency said, "A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one."

S&P expects India which is now the world's fifth-largest economy to grow at 6.4% in 2023-24 as compared to 7.2% in the previous financial year. The rating agency said the growth rate will remain at 6.4% in 2024-25 before climbing to 6.9% in the next and 7% in 2026-27.

Currently, the US is on the top of the list with a GDP of $25.5 trillion, representing a quarter of the world's GDP. China is in the second spot with a GDP of approximately $18 trillion. Japan occupies the third position with a GDP of $4.2 trillion, and Germany is fourth with a GDP of $4 trillion.

The Indian economy expanded by 7.8% in April-June and 6.2% in July-September 2022.

The Reserve Bank of India (RBI) had kept its growth forecast at 6.5% and inflation projection at 5.4% for the fiscal year. India's growth rate rose sharply due to a jump in activity in the manufacturing and construction sectors.

While the manufacturing sector's gross value added (GVA) rose by 13.9% year-on-year (YoY) in July-September, compared to 4.7% in April-June, that of the construction sector rose by 13.3% compared to 7.9% in April-June.