India set to be world’s third largest economy in 2027: finance ministry

India could become the world’s third-largest economy by 2027 with a gross domestic product of $5 trillion, the finance ministry has said.

The projections come ahead of an interim budget due to be released later this week.

In a report released Monday, the finance ministry said the economy is poised to grow at or above 7% in the fiscal year 2024. India’s fiscal year starts on April 1 and ends on March 31.

If it meets this year’s target, it will be the third straight year of 7% GDP growth for India.

The country’s GDP currently stands at $3.7 trillion.

India’s chief economic advisor, V Anantha Nageswaran, said the government’s goal is to become a developed country by 2047.

“The robustness seen in domestic demand, namely, private consumption and investment, traces its origin to the reforms and measures implemented by the government over the last ten years,” Nageswaran said in the report, explaining the key drivers of India’s growth.

He said investment in both physical and digital infrastructure helped boost the supply side and manufacturing. As a result, “real GDP growth will likely be closer to 7 per cent” in fiscal year 2025, he added.

The document released Monday was not the Economic Survey of India, which is prepared by the Department of Economic Affairs ahead of the Union Budget.

The Union Budget will only be released after the general election between April and May this year — the interim budget will be presented by Finance Minister Nirmala Sitharaman on Thursday, and is not likely to include any major changes to spending or tax policies.

According to Goldman Sachs, India is poised to become the world’s second-largest economy by 2075, leapfrogging not just Japan and Germany, but the U.S. too.

Currently, India is the…