According to S&P, India will grow by 7% in 2026 and jump from 5th to 3rd largest economy by the end of this decade
By 2030, India is poised to secure the position of the world’s third-largest economy and is anticipated to exhibit the fastest growth among major economies over the next three years, according to S&P Global Ratings’ recent report, ‘Global Credit Outlook 2024: New Risks, New Playbook.’
The report emphasises that India’s journey to claim the third-largest economy hinges on the crucial challenge of transitioning from a service-oriented economy to a global manufacturing hub.
The report mentioned, “India is set to become the third-largest economy by 2030, and we expect it will be the fastest growing major economy in the next three years. 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,”
According to the S&P report, India’s GDP is to jump from 6.4% in 2023 to 7% in 2026 as currently it is the 5th largest economy behind Germany and Japan and aims to be the 3rd largest by the end of this decade.
“We see India reaching 7 percent in 2026-27 fiscal…India is set to become the third-largest economy by 2030, and we expect it will be the fastest-growing major economy in the next three years,” S&P stated.
As per the S&P report, unleashing the potential of the labor market will primarily rely on enhancing the skills of workers and fostering greater participation of women in the workforce. These two factors are anticipated to pave the way for India to fully harness its demographic dividend.”A booming domestic digital market could also fuel expansion in India’s high-growth startup ecosystem during the next decade, especially in financial and consumer technology. In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation,” the report said.
The Global Credit Outlook 2024 report also stated, “A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity.”
Even though Prime Minister Narendra Modi’s administration has been actively promoting domestic manufacturing through initiatives like the “Make in India” campaign and production-linked incentives (PLIs), the manufacturing sector’s contribution to the GDP remains around 18%.
