India poised to become world's 3rd largest economy by 2030: S&P Global

India is poised to become the world's third-largest economy by 2030 with an estimated 7 per cent GDP growth in 2026-27, according to a S&P Global Ratings forecast released on Tuesday. India is currently the fifth largest economy in the world behind the US, China, Germany and Japan.

In its "Global Credit Outlook 2024", the S&P said: "We see India reaching 7 per cent in 2026-27 fiscal... India is set to become the third-largest economy by 2030, and we expect it will be the fastest growing major economy in the next three years."

S&P said India is expected to grow at 6.4 per cent in 2023-24 and the growth rate to remain at 6.4 per cent in 2024-25 after which it is anticipated to accelerate to 6.9 per cent in the next year and 7 per cent in 2026-27.

"A strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one," the report said.

Unlocking the labour market potential will largely depend upon upskilling workers and increasing female participation in the workforce.

"Success in these two areas will enable India to realize its demographic dividend," the report added.

S&P also expects a booming domestic digital market to fuel expansion in India's startup ecosystem during the next decade, especially in financial and consumer technology.

The report is also bullish on India's automotive sector, and expects the country's growth to be fuelled by building on infrastructure, investment, and innovation.