According to an estimate by Morgan Stanley, India would surpass Germany and Japan to become the third-largest economy in the world by 2027, helped by investments it has made in technology and energy. The Wall Street major also predicted that by 2030, India will become the third-largest stock market in the entire world.
In a research, Morgan Stanley stated that “three megatrends—global outsourcing, digitalization, and energy transition—are setting the stage for unprecedented economic growth in the country of more than one billion people.”
Ridham Desai, the Chief Equity Strategist for India at Morgan Stanley, stated that “idiosyncratic shifts” suggest a once-in-a-generation shift and an opportunity for investors and businesses.
“By 2031, India’s gross domestic product (GDP) might approach $7.5 trillion, more than doubling from its current level of $3.5 trillion. The BSE might experience 11% annual growth and achieve a market capitalization of $10 trillion in the upcoming decade, according to the paper titled “India’s Impending Economic Boom.” Its percentage of global exports may also double during that time.
The fact that chief executive officers (CEOs) feel more at ease working from their homes and in India in the post-Covid atmosphere is emphasised. According to Rhidam Desai, “Global spending on outsourcing is expected to rise from $180 billion per year to over $500 billion over the next two decades, with the number of people hired in India for work outside the nation likely to at least double, reaching more than 11 million.”
According to Morgan Stanley, a number of reasons, including corporate tax cuts, investment incentives, and infrastructure spending, are encouraging capital investments in the manufacturing sector. India is also on track to overtake China as the global manufacturing hub.
It further emphasised that by 2031, manufacturing is anticipated to account for 21% of GDP in India. As of the 2022 financial year, it was 15.6%.
The report also emphasised how India’s public internet infrastructure contributed to growth.
According to India Utilities and Industrials analyst Girish Achhipalia, the rise in energy consumption in India and the energy transformation offer up a new market to support investment growth.
He continued, “We believe this increase in capital investments will assist to unleash a positive investment cycle, with more jobs and income, more savings, and ultimately more investment.