India is set to become the third largest economy in the world by 2030, says S&P Global Ratings, predicting the country will record 7 per cent GDP growth in 2026-27.
"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," the ratings agency said in its Global Credit Outlook 2024.
The US, which is the largest economy, makes up for a quarter of the world's GDP at $25.5 trillion. It is followed by China ($18 trillion GDP), Japan (S4.2 trillion GDP) and Germany ($4 trillion GDP).
"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," S&P added.
S&P said India's GDP growth will be recorded at 6.4 per cent in the fiscal year ending March 2024 against the 7.2 per cent growth registered in the year before. The rating agency sees the growth rate remaining at 6.4 per cent in 2024-25 financial year.
The GDP is expected to climb to 6.9 per cent in 2025-26 and 7 per cent in 2026-27, according to S&P. "We see India reaching 7 per cent in 2026-27 fiscal," it added.
According to the agency, India will be able to realize its demographic dividend if it can unlock the labour market potential by upskilling workers and introducing more women to the workforce.
