NEW DELHI: According to a recent report by credit rating agency S&P Global, India is on track to become the world’s third-largest economy by the fiscal year 2030-31, driven by a projected annual growth rate of 6.7%. The report, titled India Forward Emerging Perspectives, highlights the country’s promising economic trajectory and outlines key areas for improvement to sustain this growth momentum.
S&P Global emphasized the importance of continued economic reforms to maintain this robust growth rate. The report suggests that enhancing business transactions and logistics, encouraging private sector investment, and reducing reliance on public capital are essential measures to push the economy forward.
The report also expects the Indian equity market to remain vibrant and competitive, bolstered by strong growth prospects and improved regulations. Additionally, foreign investment in Indian government bonds has seen a significant increase since the country was included in major emerging market indexes. This trend is expected to continue, further strengthening India’s financial standing.
To maximize trade benefits, S&P Global recommended that India focus on developing its infrastructure, particularly its extensive coastline. The report calls for strong port infrastructure to support the increasing volume of exports and bulk commodity imports, as around 90% of India’s trade is conducted via maritime routes.
With rising domestic energy demands, the report underscores the need for India to invest in sustainable technologies, such as renewables and low-emission fuels, to balance energy security with its energy transition goals. The agency also noted that agriculture must adopt advanced technologies and new policies to improve infrastructure and productivity. Addressing critical issues like irrigation, storage, and supply chain distribution is essential to ensure food security and economic stability.
S&P Global further suggested that leveraging artificial intelligence could significantly boost economic growth, creating opportunities for public-private partnerships to replicate the success of India’s digital infrastructure.
India’s GDP growth has been remarkable, registering an 8.2% increase in the financial year 2023-24, solidifying its position as the fastest-growing major economy. The country’s economy grew by 7.2% in 2022-23 and 8.7% in 2021-22, according to official data.
This optimism is shared by various global rating agencies and multilateral organizations, which have revised their growth forecasts for India upward. In July, the International Monetary Fund (IMF) raised its projection for India’s growth in 2024 from 6.8% to 7%, reaffirming India’s status as the fastest-growing economy among emerging markets and developing economies.
The IMF’s earlier forecast for 2024 was 6.5%, which was then revised to 6.8% and subsequently to 7%. The upward revisions were attributed to strong domestic demand and a growing working-age population, factors that are expected to continue driving India’s economic growth in the coming years.
