India’s GDP is likely to overtake China as the third-largest economy: SBI reports

SBI reports that India is likely to become the third largest economy by 2029 — up seven places since 2014 when the country was ranked 10th. India is currently ranked fifth largest economy.

“The path taken by India since 2014 reveals the country is likely to get the tag of third largest economy by 2029,” the report said.

According to a research paper from SBI’s Economic Research Department, the Gross Domestic Product (GDP) growth rate for FY23 is predicted to be between 6.7 and 7.7%, although given the current state of the world economy, 6-6.5% growth is to be expected.

Friday’s Bloomberg report stated that India had surpassed Britain to take over as the fifth-largest economy in the world. The IMF’s GDP statistics showed that India increased its lead during the first quarter. However, the SBI analysis states that as of December 2021, India had overtaken the UK as the world’s fifth-largest economy.

“The share of India’s GDP is now at 3.5 per cent, as against 2.6 per cent in 2014, and is likely to cross 4 per cent in 2027, which is the current share of Germany in global GDP,” the report added.

The research also discussed how China’s economy is expected to slow down in terms of new investment aspirations, which will benefit India’s economy.

“Global tech major Apple’s decision to shift part of its production of its flagship iPhone 14 for worldwide shipping from India, with a negligible time lag of a few weeks post its launch on September 7, bears testimony to such an optimism,” it added.

India, however, continues to trail behind the majority of global economies in terms of GDP per capita. According to data from the World Bank, its GDP per capita was $2,277 in 2021, whereas the UK’s was $47,334. At $12,556 in 2021, China’s per capita income was nearly six times more than India’s.

GDP numbers released by the National Statistical Office, on August 31 for the first quarter of FY23 showed that the Indian economy grew 13.5 per cent. The GDP growth rate was lower than the 16.2 per cent forecast by the Reserve Bank of India’s Monetary Policy Committee.

The Indian economy had registered a GDP growth of 20.1 per cent in Q1FY22, owing to a low base.