Source: Government of India (4)

If we compare growth projections with actual data, Indian economy looks all set to achieve milestones well ahead of schedule. The journey to become the world’s fourth-largest economy, to graduate to third-largest and, ultimately, to attain developed-nation status now appears firmly on track for the coming years.

The projections-versus-reality data confirm the resilience of its economy, putting it on the growth track, be it swift recovery after the COVID-19 crisis and its global after-effects or other global conflict points. The resilience gives Indian economy a positive push needed for the economic surge. India has emerged as the fastest-growing major economy, keeping inflation largely in check, even as the price pressure marker climbed worldwide and hit a 40-year high in the United States.

The economic resilience that helps India endure negative outcomes – headwinds such as persistent trade frictions—including reciprocal tariff measures by the United States and global debate around it—and geopolitical shocks such as the Russia-Ukraine war, the Israel–Hamas conflict, and broader West Asian turbulence including the recently started Israel–Iran war.

While these events are sending aftershocks through a global economy still battered by the pandemic, India’s strong macroeconomic fundamentals, strong infrastructure build-out, healthy financial sector and vast domestic market—underpinned by solid consumer demand, consistent policy, and an improving business climate—the underlying factors behind its resilience—have helped it weather the storm.

While the global economy, on a whole, decelerates, India has managed to sustain a growth rate above 6 per cent year after year—an unparalleled feat for a major economy in the current gloomy economic scenario.

Remains a Bright Spot

Borge Brende, President and Chief Executive Officer of the World Economic Forum, remarked in a recent television interview that India remains a bright spot among the world’s major economies, citing its young, tech-savvy workforce. His interview was done after a WEF analysis that warned that the 2025 global economic outlook was clouded by deep uncertainty. Back in January 2024, he had described India as a bright spot amid global doom.

The International Monetary Fund echoes this view. Its 2023 World Economic Outlook named India the bright spot in an otherwise gloomy global economic scenario, stressing that the country will be a key driver of growth in the years ahead.

The World Bank is very bullish on India’s economic growth and will remain so, said Auguste Tano Kouame, the World Bank Country Director for India, in February 2025. India is the shining light in the world, according to World Bank analysts.

The World Economic Situation and Prospects (WESP), a report released by the United Nations on 15 May 2025, states that while the global economy is slowing down, India remains the only bright spot—a point the IMF had made back in 2022.

Positive projections followed by assessments—that have been reiterated in credible analytic reports by different global agencies.

An Economic Resilience that Performs

According to an EY projection, India is expected to surpass Germany to become the world’s third-largest economy by 2027. The assessment, “India — towards becoming the third-largest economy in the world”, states that India is expected to surpass both Japan and Germany in nominal GDP terms by 2027. The projection to surpass Japan’s economy comes two years in advance—by the 2025 financial year. The EY analysis also estimates that India’s economy will cross the USD 5 trillion mark by that year, with a projected GDP size of USD 5.2 trillion.

According to the assessment, which compares nominal and PPP international dollar GDPs of six major economies—the United States, China, Japan, Germany, India, and the United Kingdom—from 2022 to projections until 2028—India leads in GDP growth rate. The country is projected to have an 8.7% compound nominal growth rate (between 2022 and 2028), outstripping China’s growth rate of 7.2%, and more than double the United States’ growth rate of 4.1% for the same period.

In PPP international dollar terms, India is already the third-largest economy, ahead of Japan and Germany, and is fast closing the gap with the United States and China. The EY analysis says India’s PPP economy is expected to register a growth rate of around 8.5% a year and will add nearly USD 7.5 trillion to its economy between 2022 and 2028—equivalent to Japan’s entire current annual PPP output in 2028. By 2028, India will further narrow this gap with China, the country with the largest economy globally in PPP international dollar terms.

The report further predicts that by 2027, in PPP terms, the United States’ economy will be just 1.7 times larger than the Indian economy, while another EY assessment estimates that by the late 2040s, with a real growth rate of 6 to 7%, India will surpass the United States to become the world’s second-largest economy in PPP terms.

Another assessment, released by Morgan Stanley in March 2025, suggests India will become the third-largest economy in the world by 2028. According to the global financial services firm, India’s economy is expected to reach USD 4.7 trillion by 2026, overtaking Japan to become the fourth-largest economy. When compared with real data, the country is expected to achieve this milestone sooner.

By 2028, India is projected to surpass Germany to become the third-largest economy globally, at USD 5.7 trillion. The analysis further states that India’s share in the world’s GDP, currently at 3.5%, is projected to rise to 4.5% by 2029.

The growth rate of the last quarter—or real GDP growth rate from January 2025 to March 2025—further confirms the resilient nature of the Indian economy. The real growth rate for the last quarter was calculated at 7.4%, outperforming expectations. In nominal GDP terms, the Indian economy was estimated to have expanded by 10.8%. A composite annual growth rate for the year 2024–25, in real GDP terms for the country, was estimated at 6.5%, in line with expectations, while in nominal terms it was estimated at 9.8%.

According to projections made in another EY analysis, the country’s GDP has the potential to cross the threshold of USD 5 trillion by 2026, USD 10 trillion by 2033, USD 20 trillion by 2042, and USD 30 trillion by 2047 in market exchange terms—a dataset that matches with projections made in India on its developmental journey to become a developed nation by 2047. In PPP terms, by 2047, India’s economy is expected to cross the USD 40 trillion-threshold. Its share in the world GDP is expected to reach 19.6% by that financial year.

India’s per capita GDP in PPP terms, which was 50% of the world’s average per capita GDP in 2022–23, is expected to become equal to it by the 2040s and 1.5 times higher by 2057.

According to a Goldman Sachs economic research report released in December 2022 on long-term economic forecasts, China, the US, India, Indonesia, and Germany are projected to be the world’s five largest economies in real GDP terms. By 2075, India is expected to replace the United States to become the second-largest economy behind China.