New Delhi: India is set to surpass Japan and Germany to become the world's third-largest economy by 2027, said Financial services company Morgan Stanley. According to a new report, India is also to become the third-largest stock market in the world by 2030.
Global offshoring, digitalisation, and energy transition are behind the unprecedented economic growth in India which is home to more than one billion people. Morgan Stanley's Chief Equity Strategist for India, Ridham Desai said that India is gaining power in the world order and called it a "once-in-a-generation" shift. He added that it is an opportunity for investors and companies, reported NDTV.
According to the report 'India's Impending Economic Boom', the country's GDP is likely to double from $3.5 trillion and surpass $7.5 trillion by 2031. The global exports from India are also likely to double in this period. A market capitalisation of $10 trillion is also expected in the next decade.
Factors like corporate tax cuts, investment incentives, and infrastructure spending are backing capital investments in manufacturing. India's share of manufacturing is expected to increase to 21% of the GDP by 2031. It is currently 15.6%. Citing this, the report noted that India is set to become the world's factory.
The Wall Street major observed that the role of public digital infrastructure in India is playing a crucial role in its growth. It is offering a low-cost comprehensive digital identity, payment, and data-management system. Desai further noted that India is one of the most underleveraged countries in the world.
The report also predicted that non-grocery retail, including apparel and accessories, leisure and recreation, and household goods and services are likely to gain from this trend.