Srinagar, Aug 28: According to the August 2025 edition of EY Economy Watch, the Indian economy is projected to grow significantly, reaching $20.7 trillion by 2030 and potentially $34.2 trillion by 2038. This optimistic outlook is driven by strong economic fundamentals, favourable demographics, and ongoing structural reforms.
India currently holds the position of the fourth-largest economy in the world by nominal GDP, with an estimated size of $4.19 trillion. With a median age of just 28.8 years, high savings and investment rates, and a declining debt-to-GDP ratio — expected to drop from 81.3% in 2024 to 75.8% by 2030 — India is well-positioned to surpass other major economies. The report suggests that India could become the second-largest economy globally within the next 13 years.
According to reports, among major economies, China is projected to reach $42.2 trillion GDP (measured at Purchasing Power Parity) by 2030 but faces challenges from an ageing population and rising debt. The US remains strong but contends with high debt exceeding 120 per cent of GDP and slower growth. Germany and Japan, though advanced, are constrained by older populations and heavy reliance on global trade.
Structural reforms—such as the implementation of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), UPI-driven financial inclusion, and Production-Linked Incentive (PLI) schemes—are boosting industrial competitiveness across sectors. India is projected to overtake Germany by 2028 to become the world’s third-largest economy in terms of market exchange rates. Even potential headwinds, such as U.S. tariffs impacting 0.9% of GDP, are expected to have only a marginal effect, with robust domestic demand and diversified exports limiting the slowdown to just 0.1 percentage point.
