New Delhi [India], August 27 (ANI): India is projected to emerge as the world’s second-largest economy in purchasing power parity (PPP) terms by 2038, with an estimated GDP of USD 34.2 trillion, according to a report by EY, based on IMF projections.
The report highlights India’s youthful demographic profile, with a median age of 28.8 years in 2025, the second-highest savings rate, and a declining government debt-to-GDP ratio—from 81.3% in 2024 to a projected 75.8% by 2030—contrasting with rising debt levels in peer economies. EY projects India’s economy could reach USD 20.7 trillion (PPP) by 2030.
The report notes that while China is expected to lead in overall size with USD 42.2 trillion (PPP) by 2030, it faces challenges from an ageing population and rising debt. The US maintains economic strength but is burdened with debt exceeding 120% of GDP and slower growth. Germany and Japan, though advanced, are constrained by high median ages and dependence on global trade. In contrast, India combines youthful demographics, rising domestic demand, and a sustainable fiscal outlook, offering the most favorable long-term growth trajectory.
DK Srivastava, Chief Policy Advisor at EY India, said, “India’s comparative strengths—its young and skilled workforce, robust saving and investment rates, and relatively sustainable debt profile—will help sustain high growth even in a volatile global environment. By building resilience and advancing capabilities in critical technologies, India is well-placed to move closer to its Viksit Bharat aspirations by 2047.”
The report attributes India’s projected growth not only to demographics but also to structural reforms and resilient fundamentals, including GST, IBC, financial inclusion through UPI, and production-linked incentives, which strengthen competitiveness across sectors. Public investment in infrastructure and adoption of emerging technologies such as AI, semiconductors, and renewable energy are further reinforcing long-term economic resilience.
EY also projects that India could become the third-largest economy in market exchange rate terms by 2028, overtaking Germany. The report notes that while US tariffs may impact nearly 0.9% of India’s GDP, the effect on GDP growth can be limited to just 0.1 percentage point with measures such as export diversification, stronger domestic demand, and enhanced trade partnerships. (ANI)
About The Author
