New Delhi: Indian economy will overtake the US by 2038 to become the second largest in about 13 years, according to a new study.
The August 2025 edition of EY Economy Watch has projected Indian economy to be $20.7 trillion by 2030, NDTV reported.
The upward trend of the growth will take the economy to potentially $34.2 trillion by 2038.
The report points to favourable factors in country including strong economic fundamentals favourable demographics, and ongoing structural reforms, among others.
Given the country’s population with median age of 28.8 years, high savings and investment rates along with government debt-to-GDP ratio likely to falling from 81.3 per cent in 2024 to 75.8 per cent by 2030, India will overtake today’s major economies to become the second largest.
Currently India is the fourth largest economy globally by nominal GDP with approximately $4.19 trillion.
In the event of India growing at the rate of 6.5 per cent beyond 2030, while the US at 2.1 per cent, the Asian giant is likely to overtake the US economy in PPP terms by 2038.
DK Srivastava, Chief Policy Advisor at EY India said: ‘India's comparative strengths, its young and skilled workforce, robust saving and investment rates, and relatively sustainable debt profile will help sustain high growth even in a volatile global environment.’
Of the major economies, China will reach $42.2 trillion GDP by 2030 and the country will face challenges such as ageing population and rising debt.
The US will continue to be a strong economy but will have to struggle with debt exceeding 120 per cent of GDP alongside slowing growth.
Today’s major economies including Germany and Japan will face challenges from older populations and heavy reliance on global trade.
It is reported that India will become the third-largest economy in market exchange rate terms by 2028, overtaking Germany.