India is on the path to becoming the world’s third-largest economy by 2030, purging on to remain a growing economy at full tilt, S&P Global Ratings said in a report.
India is on the path to becoming the world’s third-largest economy by 2030, pounding to remain a growing economy at full tilt, S&P Global Ratings said in a report.
S&P sees India grow at 6.4% this fiscal and expects the economy to reach 7% by fiscal 2027. Contemporaneously, China’s growth will take a backseat at 4.6% by 2026 from an estimated 5.4% in 2023.
India’s gross domestic product (GDP) outpaced expectations at 7.6% in the second quarter of fiscal 2024, adding hopes to the full-year estimates.
S&P report believes India’s growth hinges on how it turns itself to a manufacturing-dominated economy from a services-dominated one.
“A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity,” S&P said in its Global Credit Outlook 2024 report, dated December 4.
Make-in-India campaigns and production-linked incentives (PLIs) need patronage aggressively as manufacturing contributes only 18% to the GDP, whereas over half of India’s GDP is from the service sector.
S&P said building a robust logistics framework is pivotal to becoming a manufacturing hub, besides “upskilling” its workers and promoting female participation in the workforce to realize its “demographic dividend.”