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3rd -Largest-Economy

28th December, 2022

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Context

  • India will account for a fifth of total global economic growth in the next decade, a forecast by Morgan Stanley
  • The expanding size and scale of the country's economy will be the prime drivers of this surge.

The Report and its Projections

  • The report titled 'Why This Is India's Decade' underlines the trends and policies driving the future of the country's economy.
  • According to the report, India's GDP is set to double from the current $3.4 trillion to $8.5 trillion over the next decade.
  • India will add more than $400 bn to its GDP every year, a scale that is only surpassed by the US and China.
  • The required conditions are in place to make India the world's the economy as well as the world's third largest stock market by 2027, it said.
  • It projected that by 2032, India’s market capitalization will go up from $3.4 trillion to $11 trillion by 2032 — the third biggest and largest.
  • Four key factors — demographics, digitalization, decarbonization and deglobalization — are likely to facilitate India's rapid rise.
  • According to the report, the number of households making more than $35,000 a year is set to rise fivefold in the coming decade.
  • India's per-capita income is set to rise from the current $2,278 to $5,242 in 2031, the report added.

Key Takeaways from the Morgan Stanley report:

  • India's global export market share is expected to more than double at 4.5 per cent by 2031, providing an incremental USD 1.2 trillion export opportunity.
  • India's services exports will almost treble to USD 527 billion (from USD 178 billion in 2021) over the next decade.
  • E-commerce penetration to nearly double from 6.5 per cent to 12.3 per cent by 2031.
  • Internet users in India to increase from 650 million to 960 million while online shoppers will grow from 250 million to 700 million over the next 10 years.
  • Around 25 per cent of incremental global car sales over 2021-2030 will be from India and expect 30 per cent of 2030 passenger vehicle sales to be electric-run.
  • India should hit a "major inflection point" for the next residential property boom in 2030 - a confluence of high per-capita income, a mid-30s median age, and higher urbanization.
  • India's workforce in the technology services sector to more than double from 5.1 million in 2021 to 12.2 million in 2031.
  • Healthcare penetration in India can rise from 30-40 per cent now to 60-70 per cent; implying 400 million new entrants to the formal healthcare system.
  • Over USD 700 billion in energy investments are expected over the next decade as India accelerates its energy transition.

Morgan Stanley

Morgan Stanley is an American multinational investment management and financial services company headquartered in New York City. With offices in more than 41 countries, the firm's clients include corporations, governments, institutions, and individuals.  Morgan Stanley is a financial services corporation that, through its affiliates and subsidiaries, advises, and originates, trades, manages, and distributes capital for institutions, governments, and individuals. The company operates in three business segments: Institutional Securities, Wealth Management, and Investment Management.

https://economictimes.indiatimes.com/news/economy/indicators/3rd-largest-economy-market-a-5th-of-global-growth-morgan-stanley-forecasts-indias-rise-in-coming-decade/articleshow/95384904.cms