India Poised to Overtake the US and Become World’s Second-Largest Economy by 2075

India Poised to Overtake the US and Become World’s Second-Largest Economy by 2075

Ira Singh
21 July’23

In a landmark economic forecast, leading financial analysts predict that India is on track to overtake the United States and secure its position as the world’s second-largest economy by 2075. The projection highlights the significant economic growth and development the South Asian nation has achieved over recent decades.

In a seal of approval on India’s growth story, investment bank Goldman Sachs has said the country is poised to become the world’s second-largest economy by 2075, surpassing the likes of Japan, Germany and the United States.

The Rise of India’s Economic Powerhouse:

India’s remarkable trajectory towards economic supremacy has been a result of several key factors that have shaped its growth over the years. A young and rapidly expanding population, coupled with a burgeoning middle class, has fueled domestic consumption and productivity. Moreover, the country has made substantial advancements in education and technology, fostering an environment conducive to innovation and entrepreneurship.

Moreover,the favourable demographics, innovation and technology, higher capital investment and rising worker productivity will drive India’s growth, the report stated.Currently, India is ranked the world’s fifth-largest economy, trailing Germany, Japan, China and the US.

“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” said Goldman Sachs Research’s India economist, Santanu Sengupta.

“India has made more progress in innovation and technology than some may realise. Yes, the country has demographics on its side, but that’s not going to be the only driver of GDP. Innovation and increasing worker productivity are going to be important for the world’s fifth-biggest economy. In technical terms, that means greater output for each unit of labour and capital in India’s economy,” said Sengupta.

India requires 7.6 percent annual growth for 25 years to attain developed nation status: RBI bulletin

India’s path to achieving developed nation status has been outlined in a recent research paper published in the Central Bank’s monthly bulletin. The report reveals that India must sustain an annual growth rate of 7.6 percent over the next 25 years to successfully transition into a developed economy. As per World Bank standards, a key criterion for classifying a country as a high-income nation is its per capita income. Presently, India’s per capita income stands at $2,500, necessitating a significant increase to surpass $21,664 by the year 2047, according to sources.

India’s growth trajectory is on a steep incline, underpinned by robust GDP growth, increased foreign investments, the rise of the middle class, and a focus on technology and innovation. As the nation continues its journey towards economic prosperity, strategic planning and collaboration among stakeholders will be vital in harnessing the immense potential and making India a beacon of growth and opportunity on the global stage.