Calling upon states to take advantage of free trade agreements the country is signing with developed countries, NITI Aayog vice-chairman Suman Bery on Thursday said that the size of the Indian economy in the purchasing power parity (PPP) terms has reached $15 trillion, which is more than half the size of the US economy.
PPP provides a way to compare the real value of money between countries, by estimating the currency units required to purchase certain good that can be purchased with one unit of the reference economy’s currency.
“While we are a $4 trillion GDP at market prices, at PPP term, we are $15 trillion economy,” Bery said, addressing the Annual Business Summit 2025 of the industry body CII. The size of the US economy in PPP terms is around $29 trillion.
Bery said India needs to diversify its sources of supply, so the country would not have to depend on a particular supplier.
With the central government creating the conditions through negotiation of free trade agreements (FTAs) and bilateral investment treaties, states have to come forward to harness these opportunities, he said. He said competitiveness should not only be restricted to manufacturing but should extend to services as well.
India’s labour productivity is the lowest among the G20 nations, and a sustained rise in productivity of labour productivity is crucial for India to leverage its demographic dividend, he said.
“India’s track record has not been bad in terms of growth productivity, but it needs to get better. Our problem is our low level of labour productivity, not only with respect to the US but also with respect to some of our peers, such as China and other peers in ASEAN,” he said.
With India maintaining an average growth rate of 6.5% for the 30 years since 1991 reforms till the COVID-hit 2021, Bey suggested that the roots of resilience in India are as much in our institutions as they are in our policies.