In a promising projection for India’s economic future, the State Bank of India’s Economic Research Department, in its report SBI Ecowrap, has forecasted that India is likely to secure the tag of the world’s third largest economy by the fiscal year 2027-2028 (FY28). This projection signifies a remarkable upward trajectory for India’s economy and reflects the nation’s continuous efforts towards growth and development.
The report highlights that the path India has taken since 2014 indicates the nation’s potential to claim the third-largest economy position by 2027 or FY28, based on actual GDP data as of March 2023. This ascent is particularly significant, as it signifies a movement of seven places upwards since 2014, when India was ranked tenth. Notably, the prediction of reaching this milestone has been advanced by two years compared to the bank’s previous forecast of achieving this feat by 2029.
The optimistic outlook further suggests that India is likely to surpass both Japan and Germany in terms of economic size by 2027, assuming the current rate of growth is sustained. Interestingly, the incremental increase in India’s GDP between 2022 and 2027 is expected to exceed the entire size of Australia’s economy, which currently stands at $1.8 trillion.
Based on these projections, the report highlights that India is poised to add approximately $0.75 trillion to its economy every two years. At this rate, India’s economy is set to touch the $20 trillion mark by 2047. Moreover, India’s global share in GDP is expected to cross 4% by 2027, signifying its growing influence and significance on the world stage.
The report also sheds light on India’s near-term prospects, suggesting that the country’s GDP in the first quarter of the financial year 2023-2024 (Q1FY24) is likely to surpass 8%. This anticipated growth is expected to drive India’s overall GDP growth beyond 6.5% for FY24. The report emphasizes that in a world facing uncertainties, a growth rate of 6.5-7% is considered the “new normal” for India.
The economists at the State Bank of India expressed their confidence in India’s sustained growth, referring to the current period as a “sustained goldilocks” phase for the economy. They view India’s potential ascent to the third-largest economy as a remarkable achievement by global standards and a testament to the nation’s economic resilience and potential.
Moreover, the report points out that at least two Indian states, namely Maharashtra and Uttar Pradesh, are expected to break the $500 billion-mark by 2027 or FY28, coinciding with India’s rise to the third position in the global economy. The report particularly mentions Uttar Pradesh, which is governed by Chief Minister Yogi Adityanath, as the “land of the midnight sun,” alluding to its promising prospects.
Additionally, the GDP size of major Indian states in 2027 is projected to surpass the size of certain Asian and European countries, such as Vietnam and Norway, highlighting the economic strength and diversity within India.
These forecasts align with the vision of Prime Minister Narendra Modi, who had earlier expressed confidence that India would be among the top three economies globally during his third term in office. The encouraging projections by SBI Ecowrap reinforce the country’s potential and reflect the efforts undertaken to achieve sustained economic growth and prosperity. As India continues to chart its growth path, these projections serve as a source of optimism and inspiration for policymakers, businesses, and citizens alike.