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    Vision: India's $5 Trillion Economy. How soon? How far?

    May 31, 2019
    2 min | Views 10587

    India is world’s 6th largest economy with a nominal GDP of 2.61 trillion USD and would reach 5th place1 by the end of 2019.

    Does India have in it to become a US$ 5 trillion economy in the year 20252, as projected?

    India is presently the world’s fastest growing economy and IMF has predicted the GDP growth at 7.3% in 20193.

    India’s Demographic Dividend:

    It has the world’s largest youth population4 with more than 60% of Indian youth falling in the working age group.

    While Indian economy is on the upward swing, the growth in developed countries has become moderate as capacity is reached.

    Comparison of projected GDP growth5 in 2019:

    India 7.3%

    USA 2.8%

    Japan 1.0%

    Europe 2.0%

    Domestic Consumption in India

    It is expected to more than double to reach $3.1 trillion by 2030. The middle class will contribute nearly 60% to the growth6.

    India's Retail market is expected to increase by 60 per cent to reach US$ 1.1 trillion by 202015

    The FMCG sector will grow ~11% in 201914

    Frameworks in place

    Corrective policy measures like GST implementation will propel the country towards sustained economic growth7.

    The government’s Digital India initiative has brought impact in education, health, ecommerce, agriculture, financial inclusion

    A new narrative of growth is shaping. Some sectors to take note are:

    Packaged food market is expected to be $200 billion in ten years8

    Indian technology companies expect India's digital economy to have the potential to reach US$ 4 trillion by 20229.

    The Indian automobile market will become the third largest passenger vehicle market in the world by 202110.

    India’s Fintech sector’s largest segment is Digital Payments will reach US$135 billion by 202311 from transaction value of US$65 billion in 2019.

    Cheap data, internet penetration and smartphone access has given rise to over-the-top (OTT) market which is likely to generate $5 billion in annual revenues by 202412.

    The positive winds promise a smooth sailing as India embarks on a gigantic Voyage.

    Source:
    1https://www.investopedia.com/insights/worlds-top-economies/
    2http://pib.nic.in/newsite/PrintRelease.aspx?relid=184130
    3https://www.moneycontrol.com/news/business/economy/what-the-imf-says-about-the-outlook-for-the-indian-economy-3797841.html
    4http://pib.nic.in/newsite/PrintRelease.aspx?relid=186080
    5https://www.un.org/development/desa/dpad/publication/world-economic-situation-and-prospects-february-2019-briefing-no-123/
    6https://www.weforum.org/agenda/2019/01/globalization-india-cities-is-driving-consumption-middle-class/
    7http://pib.nic.in/newsite/printrelease.aspx?relid=170163
    8https://www.bloombergquint.com/business/why-indias-packaged-food-market-will-jump-to-200-billion-in-a-decade
    9https://www.ibef.org/archives/detail/b3ZlcnZpZXcmMzc2NTMmODk
    10https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/the-future-of-mobility-in-indias-passenger-vehicle-market
    11https://www.statista.com/outlook/295/119/fintech/india
    12https://dazeinfo.com/2018/11/22/indian-ott-market-by-2023/
    13http://www.businessworld.in/article/Reflections-2018-Outlook-2019-Real-Estate-Market-Makes-Strong-Comeback-With-Growth-Trajectory/02-12-2018-164655/
    14https://www.ibef.org/industry/Fmcg-presentation
    15https://www.ibef.org/industry/retail-india.aspx

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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