India will become a $6.7 trillion (GDP) economy by 2030-31, growing on an average 6.7% per year from 2023-24, says a research report "Look Forward - India's Moment" published by S&P Global, an international data, research and analytics firm. The country's per-capita income will rise to about $4,500, it said. India's GDP was $3.4 trillion in 2022-23.
Capital accumulation led by growth in private capital investment is expected to be the key driver of growth during this period. "Investment as a proportion of GDP reached a 10-year high of 34% in fiscal 2023. The government has played a key role in boosting investment by offering substantial support for infrastructure projects and by incentivizing manufacturing. We expect Indian private sector to gradually increase investments given healthy corporate balance sheets", the report said. It forecasts that capital will contribute 53% of India's 6.7% average GDP growth through the end of the decade.
According to the report, India needs to take full advantage of its large and growing working age population. "The short term economic growth will stand on the shoulders of its 678.6 million strong labour force. Getting more women to enter the workforce will be pivotal for future growth as only 24% were participating in 2022,” it notes.
The report also forecasts services share of GDP to continue to rise, along with manufacturing. "Gains for services will be fueled by exports in information technology and IT enabled services, along with domestic sectors such as retail, food services, trading, financing and healthcare. The question whether India can generate employment and productivity growth from services at levels similar to those once achieved by manufacturing countries in East Asia,” it observes.
S&P experts expect venture capital flow into Indian startups to double by 2030, with newer verticals like EVs, space technology, AI, drones, robotics and clean energy to benefit the most.
"This latest edition of Look Forward research provides our customers and the market essential intelligence on India, one of the most dynamic and fast changing countries in the world", Martina Cheung, President of S&P Global Ratings and Executive Sponsor of the S&P Global Research Council says.