Can India Really Become a $5 Trillion Economy?

For years, the Eurozone and US markets were the major players in the global economy, with traders and investors focusing their forecasting on how those markets were acting. Then Japan and China came onto the scene in a big way – and now it’s the turn of India.

Why is the Indian economy so strong?

Following the financial crisis of 2008, the global economy has been in a period of steady decline that was exacerbated by the pandemic, increased inflationary pressures and the Russian invasion of Ukraine. Smart investment in infrastructure has seen the Indian economy more prepared than most to handle these unprecedented pressures.

The Indian economy and investors

A growth economy is a strong pull for investors looking to reap significant financial rewards. India is set to surpass China as the most populated country in 2023 – and will also have the largest population of 20 – 44-year-olds. And these are the people on which its economy can grow to new heights.

Analysts expect inflation in India to be around 4% over the next four years, with the rupee depreciating by around 2%.  This is in contrast to some other major markets that continue to grapple with rising inflation and the knock-on effect that has on consumer spending and market confidence. As a result, investors from around the world are increasingly interested in the positive signs they see in the economic data calendar in relation to India.

How does India compare to other world economies?

The US and the Eurozone are expected to see shrinkage in 2023. Aside from their struggles to recover financially from the pandemic, both have elections on the horizon that will go a long way toward setting a new fiscal agenda and providing stability in the markets.

Emerging Asia is forecast to grow by 3.9%, with China – for all its post-Covid troubles – predicting growth of 5%.

India trumps them all with a predicted growth of between 5.8% – 6%. Together with the population growth mentioned earlier, this puts India in a very strong position when it comes to attracting investment and seizing the opportunity to kick on in a big way.

Tech is the way forward

The 20 – 44 demographic is one that is apt to embrace technology and innovation. And this must be the key driver for India as it looks to seize this opportunity to become a $5 tr economy – and a major player on the world stage.

Technology enables businesses to scale at pace. It presents an opportunity to gain maximum output from minimum input once the initial investment in the technology and infrastructure has been made. By leveraging its fiscal strength and plethora of human resources, India can invest in emerging technologies that will set it up for a prosperous future.

All the signs are that India is not far off becoming a $5 tr economy. And right now, investors are keen to put their money into the country. All that’s required to make that happen is for the strength of the Indian economy to be matched by the strength of its ambition.

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