India Will Become Third-Largest Economy By 2027: Morgan Stanley Forecast Shows How?
New Delhi: India will become the world’s third-largest economy by 2027. A shift in policy approach towards boosting investment, demographics advantages and the public digital infrastructure will make this possible, according to a Morgan Stanley forecast.
India’s gross domestic product (GDP) will grow from the current $3.4 trillion to $8.5 trillion over the next 10 years. Incrementally, India will add more than $400 billion to its GDP every year, a scale that is only surpassed by the US and China, Morgan Stanley’s chief Asia economist Chetan Ahya wrote in Financial Times.
In a multipolar world where companies are diversifying their supply chains, India is emerging as a destination of choice. India is entering a phase where incomes will be compounding at a fast rate on a high base. For context, India took 31 years since 1991 to raise its GDP by $3 trillion. According to our projections, it will take just another seven years for the GDP to grow by an additional $3 trillion,” he said.
Drawing a distinction between India and other economies on the digital infrastructure front, he said India has built a public digital infrastructure that is based on Aadhaar, while other economies have taken the private network route. He said further layers are being built that will leverage this digital infrastructure to better match consumers and businesses and ease the cost of doing business.
In this regard, he cited the example of the Open Network for Digital Commerce (ONDC), which is touted to be the equivalent of UPI (unified payment interface) in e-commerce.
“The shift in India’s policy approach is moving it closer to the East Asian model of leveraging exports, raising savings, and recycling it for investment,” Ahya noted.
Citing the example of China, he said India’s GDP today is where China’s was in 2007 – a 15-year gap.