India to Become Asia’s Second Largest Economy by 2030

India to Become Asia’s Second Largest Economy by 2030: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

India to Become Asia’s Second Largest Economy by 2030: Context

• According to the recently released report by IHS Markit, India is likely to overtake Japan as Asia’s second-largest economy by 2030.

India to Become Asia’s Second Largest Economy by 2030: Key points

• At present, India is the sixth-largest economy in the world, behind the US, China, Japan, Germany and the United Kingdom.
• The report highlighted that India is projected to surpass that of Germany and the UK and Japan to rank as world’s No.3 by 2030.
• The report said that India’s nominal GDP measured in USD terms is forecast to rise from USD 2.7 trillion in 2021 to USD 8.4 trillion by 2030.
• This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region.
• Overall, India is expected to continue to be one of the world’s fastest-growing economies over the next decade.

India to Become Asia’s Second Largest Economy by 2030: Reasons

• Middle class: An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending.
• Growth rebound: India’s real GDP growth rate is projected to be 8.2 per cent, rebounding from the severe contraction of 7.3 per cent year-on-year in 2020-21
• Investment destination: The rapidly growing domestic consumer market as well as its large industrial sector have made India an increasingly important investment destination for many multinationals, including those in manufacturing, infrastructure and services sectors.
• Digital India: The digital transformation of India that is expected to accelerate the growth of e-commerce, thus changing the retail consumer market landscape over the next decade. The rapid growth of e-commerce and the shift to 4G and 5G smartphone technology will boost home-grown unicorns like online e-commerce platforms.

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