India reported double digit economic growth at 13.5 per cent in the first quarter of the current fiscal. At this rate, India is likely to be the fastest growing economy in the current fiscal, said SBI in a research paper adding that even as estimates of India’s GDP growth rate for FY23 range from 6.7% to 7.7%, it is immaterial as in a world that is plagued by uncertainties, 6% -6.5% growth is the new normal. Seeing the path taken by India since 2014, India is likely to get the tag of 3rd largest economy in 2029, 7 ranks higher since 2014 when the country was ranked 10th. “India should surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth, a remarkable achievement by any standards.” the research paper said.
India to benefit as China slows down
According to analysts, India has undergone a large structural shift since 2014 and is now the 5th largest economy. Recently it was reported that India crossed the UK to become the world’s 5th largest economy. However, SBI Research analysts believe that India had surpassed the UK as early as December 2021 itself and not recently as is being claimed. Note that the share of India’s GDP is now at 3.5%, as against 2.6% in 2014, and it is likely to cross 4% in 2027, the current share of Germany in global GDP, the research paper said, In coming days India is expected to be the beneficiary as China slows down in terms of new investment intentions, it added.
More global conglomerates may turn to India
Global tech giant Apple recently decided to shift part production of its flagship iPhone 14 model for worldwide shipping from India, with a negligible time lag of a few weeks after its slated launch on September 7. According to SBI’s Research, this move by Apple, the most recognisable face of tech infused innovation across the globe in the last two centuries, captures aspirations of an upwardly mobile population. “it should open the floodgates for other major conglomerates to follow suit,” the paper stated. Additionally, a broad-based growth of empowerment will also lift India’s per capita income from current levels.
Analysts said that just how at the beginning of 21st century, China embarked on an accelerated growth path occupying the second largest economy tag, with the right policy perspective and realignment in global geopolitics, India might see a similar trajectory in the near future. “Our current estimates might even undergo an upward revision,” they added.