India's status as a shining spot in an uncertain global economy appears to be brightening as influential global voices express optimism for the future of the economy.
On the international geopolitical stage, India is rapidly gaining authority. This provides the country with a significant advantage to leverage multipolar world dynamics, according to the report.
In a report titled 'Look Forward: India's Moment,' S&P Global, a global data, research, and analytics firm, stated that "everyone is watching India" at a time when the world is experiencing disruptions.
"The trillion-dollar question is whether India can sustain high growth… Our answer to the sustained growth question is a conditional 'yes'," S&P Global said in its report, released on August 3.
"We expect India to grow 6.7 percent per year from 2023-24 to 2030-31, catapulting GDP to $6.7 trillion from $3.4 trillion in 2022-23. Per capita GDP will rise to about $4,500," the agency added.
The approval from S&P Global came hours after Morgan Stanley upgraded its view on India to 'overweight' – while downgrading China to 'equal weight' and Australia to 'underweight' – because the country is poised for substantial and sustained economic growth at a time when the rest of the world is slowing down.
"Multipolar world trends are supporting FDI (Foreign Direct Investment) and portfolio flows, with India adding a reform and macro-stability agenda that underpins a strong capex and profit outlook," Morgan Stanley strategists said.
Not only S&P Global and Morgan Stanley are bullish on the Indian economy, but so are many other firms. The International Monetary Fund (IMF) increased its GDP growth forecast for India for 2023-24 by 20 basis points, to 6.1 percent, on July 25. The IMF cited the momentum from the explosive growth rate for January-March as the reason for the increase.
The Indian economy posted a gross domestic product (GDP) growth rate of 6.1% in January-March, which was 100 basis points higher than the consensus estimate.
India's services Purchasing Managers' Index increased to 62.3 in July, the highest level in over 13 years, according to data released earlier today, August 3, by S&P Global.
In the weeks leading up to the G20 Leaders' Summit, which will be held in New Delhi on September 9-10 under India's Presidency, there has been an increase in the volume of economic commentary regarding India. On the sidelines of the G20 Finance Ministers and Central Bank Governors meeting in Gandhinagar, India, on July 17, World Bank President Ajay Banga stated that he is more optimistic about India's development prospects than he has been "in a long time."
Standard Chartered Bank predicted in a report published on July 19 that India will become the third-largest economy in the world by 2030 and have a GDP of $6 trillion, with macroeconomic stability serving as the "linchpin" of the country's medium-term development story.
"However, fast-paced action is required to increase both employment opportunities and employability of the young population, especially in the age of AI (artificial intelligence)," economists from Standard Chartered Bank said, adding that additional steps to address job creation, physical-social infrastructure gap, income inequality, and climate challenges could further boost growth prospects.
India will likely become the world's third-largest economy in 2027-28, two years earlier than its previous projection of 2029-30, according to the research team of the State Bank of India.
India must develop at a CAGR (compound annual growth rate) of 8.4 percent from 2017 to 2027 (in terms of dollars) if it is to achieve the third position. This translates to 11-11.5 percent nominal GDP growth per year (in terms of rupees), which is achievable," Soumya Kanti Ghosh, SBI's principal economic adviser, wrote in a report dated July 27.