India on track to become the world's third-largest economy: 'Economic giant of the future'

12PUNTO FOREIGN NEWS

According to a published report, India is on track to become the world's third-largest economy by 2031. The country is currently the world's fifth-largest economy, following the US, China, Japan, and Germany. Analysts expect India to become a 10 trillion dollar economy by the end of this decade. 

International credit rating agency S&P projects an annual GDP growth of 6.7% for India in its latest report. According to government data, GDP grew by 8.2% in the 2023-24 fiscal year and 7.2% in the previous fiscal year, solidifying India's position among the world's largest economies. 

INDIA STANDS OUT IN THE ARTIFICIAL INTELLIGENCE MARKET

S&P also stated that artificial intelligence will play a critical role in key sectors in the future. According to the National Association of Software and Service Companies (NASSCOM), the artificial intelligence market in India is expected to grow to between 17 billion and 22 billion dollars by 2027.

The report stated that the agricultural sector, which contributes 18 percent to GDP and provides a livelihood for 47 percent of the population, must rely on advanced technologies and new policies to 'increase infrastructure and productivity'.

Thanks to its skilled workforce and investments in the sector, India ranks among the most important countries in the field of artificial intelligence.

According to Analytics India Magazine, India is taking firm steps toward becoming 'one of the economic giants of the future'.

Size of the artificial intelligence market in India (billion dollars/year) Source:Analytics India Magazine

WORLD BANK AND IMF ALSO UPDATED THEIR REPORTS

The World Bank (WB) raised its growth forecast for India from 6.6% to 7% earlier this month. This revision by the WB indicates an expectation that the Indian economy could expand due to factors such as increased private consumption and incoming investment into the country.

The report states that despite the economy's resilience, reaching an ambitious target of 1 trillion dollars in goods exports by 2030 will require strategic diversification and greater integration into global value chains.

The IMF had also previously revised its growth expectation for India to 7 percent. The IMF highlighted the 'significant increase in private consumption' as the primary factor leading to this decision.

According to S&P, India is one of the most ambitious countries in the artificial intelligence market alongside the US and China

FINANCIAL INSTITUTIONS POINT TO INFRASTRUCTURE DEFICIENCIES IN INDIA

S&P emphasizes that for India to sustain its growth, it must improve its business relations and logistics infrastructure. 

The credit rating agency also states that the country must implement reforms to increase private sector investment and reduce its dependence on public capital. 

The IMF had previously noted that India should focus on developing its port and coastal infrastructure to accommodate its increasing exports.

News Source: 12punto