India’s Economic Crossroads: The Four Pillars Driving a $10 Trillion Future

India is poised to become a $10 trillion economy by 2040, emerging as the world’s third largest, according to DBS Bank’s Radhika Rao. The transformation hinges on four pillars—the 4Ds: Development, Diversification, Digitalisation, and Decarbonisation. These focus on infrastructure, trade expansion, technological innovation, and green growth. Together, they outline a roadmap for India’s sustainable rise toward Viksit Bharat (Developed India) by 2047.

As India’s economy accelerates into a new era, it finds itself standing at a decisive turning point — one that will define its position in the global order for decades to come. A new analysis by Radhika Rao, Executive Director and Senior Economist at DBS Bank, paints a confident picture of a nation on the brink of transformation. The report, titled “India 2025–40 Outlook: Pivotal Juncture,” foresees India racing toward a $10 trillion economy by 2040, solidifying its place as the world’s third-largest economy.

Yet, this milestone won’t be reached by inertia alone. Rao identifies four key forces—the 4Ds of Development, Diversification, Digitalisation, and Decarbonisation—as the strategic drivers that will shape India’s journey toward becoming a resilient and sustainable global powerhouse.

1. Development: Laying the Economic Bedrock

India’s growth story, Rao notes, is entering a transformative phase. Between 2025 and 2040, economic expansion is projected to average 6.7%, with the potential to exceed 7% if investment and trade remain robust. This trajectory could elevate India into a high middle-income economy within the next two decades.

The foundation of this rise is a strong focus on capital formation, productivity, and human development. By 2040, with over 900 million people in the working-age bracket, India’s ability to educate, skill, and employ its citizens will determine the pace and inclusivity of its progress.

Government-led infrastructure projects such as Gati Shakti, the National Infrastructure Pipeline, and the National Logistics Policy are set to catalyze growth, connecting industries, and boosting job creation. Rao emphasizes that investment in human capital—through education, health, and vocational training—will be just as important as physical infrastructure in sustaining long-term prosperity.

2. Diversification: Broadening India’s Global Reach

The second cornerstone of Rao’s vision is diversification—broadening India’s economic base and strengthening global trade links. Although India’s economy relies heavily on domestic demand, the next growth phase will hinge on expanding manufacturing capacity and embedding the nation more deeply into global supply chains.

Efforts such as the Production Linked Incentive (PLI) schemes, active pursuit of Free Trade Agreements (FTAs), and initiatives to lure high-tech investments signal a strategic shift. The goal: raise exports from roughly 21% of GDP today to 30–32% by 2040, positioning India as a key alternative to China in global manufacturing networks.

Industrial powerhouses like Tamil Nadu, Gujarat, and Karnataka are leading the charge, establishing themselves as magnets for foreign direct investment (FDI) and innovation-driven industries.

A shining example of India’s rising global ambitions is GIFT City (Gujarat International Finance Tec-City) — envisioned as India’s first international financial and technology hub. Offering world-class business infrastructure and tax advantages, GIFT City’s banking assets are forecast to surpass $100 billion by 2026, rivaling hubs like Dubai and Singapore in scale and sophistication.

3. Digitalisation: Powering a Smarter, Connected Economy

The third force transforming India’s growth story is digitalisation. Over the past decade, India’s digital stack—spanning Aadhaar, UPI, and DigiLocker—has dramatically enhanced financial inclusion, digital payments, and public service delivery.

The next phase, according to Rao, will be driven by artificial intelligence (AI), data analytics, and automation, offering productivity gains across sectors. However, she also warns that technological growth must be guided by thoughtful policy and regulation, ensuring data privacy, ethical use, and smooth employment transitions in an increasingly AI-driven world.

An emblem of this tech-fueled future is India’s expanding network of Global Capability Centres (GCCs), which now host nearly 45% of all such centres worldwide. Once seen as back-office operations, these hubs now anchor research, analytics, and innovation, generating around $65 billion in annual revenue and providing employment to nearly two million professionals. By 2030, that revenue is expected to rise to $100 billion, marking India’s ascent as a global digital innovation hub.

4. Decarbonisation: Building a Sustainable Growth Path

India’s long-term prosperity, Rao underscores, hinges on how effectively it manages its climate transition. As one of the world’s top energy consumers and emitters, the task is twofold—sustain growth while drastically reducing carbon output.

India’s net-zero goal by 2070 and its intent to source half of its power from renewables by 2030 mark clear commitments to sustainability. Already, renewables account for more than 45% of the nation’s installed capacity, with ongoing initiatives in green hydrogen, carbon capture, and circular economy models strengthening the path to a greener economy.

However, the transition must be inclusive and equitable. Workers and communities dependent on fossil-fuel industries will need support in terms of reskilling, entrepreneurship, and social safety nets. Moreover, as industries like AI and data centres grow more energy-intensive, the importance of clean and reliable power will only deepen. The development of critical mineral supply chains—for materials like lithium and cobalt—will also be essential to supporting India’s renewable ambitions.

A Defining Decade for Viksit Bharat

The DBS report encapsulates a pivotal truth: India’s path to becoming a Viksit Bharat (Developed Nation) by 2047 will depend on how it harmonizes growth, inclusion, and sustainability.

Driven by the four pillars of Development, Diversification, Digitalisation, and Decarbonisation, this journey represents far more than an economic projection—it’s a vision of transformation. If pursued with bold, forward-looking policies, Rao suggests, India’s next decade could mark the beginning of an economic renaissance—reshaping both its internal landscape and its role on the global stage.