India's economy is projected to surpass USD 4 trillion in the next two years, accompanied by a stabilized inflation rate of 4.5%, as reported by the PHD Research Bureau on January 10, 2024.

The report, titled 'New Year Economics: PHDCCI Economic Outlook 2024,' anticipates India securing a place among the top 10 leading economies for the next two years. The analysis is grounded in key macroeconomic factors, including GDP growth, export growth, gross national savings, total investments, and the debt-to-GDP ratio.

Commenting on the report, Shri Sanjeev Agrawal, President of the PHD Chamber of Commerce and Industry, expressed, “India is poised to attain the status of a 'developed economy' by 2047 with the dynamic initiative of 'Viksit Bharat.' With a consistent GDP growth rate exceeding 7% over the past two years and a projected continuation of this trend in the current year too, the economy is expected to surpass USD 4 trillion in 2024 and move to the next orbit in 2025. India is making significant strides for its futuristic growth trajectory, and the GDP in the current financial year is expected to expand at 7.4 to 7.5%.”

Additionally, estimates by the National Statistics Office (NSO) indicate a growth of 7.3% in real GDP during the financial year 2023-24, as published on January 5, 2024.

Sanjeev added, “Despite global headwinds, India's economy remains resilient. Geopolitical conflicts are reshaping the world, disrupting global value chains, and causing inflationary pressures. However, India's geopolitical significance is growing significantly, earning praise from international institutions.”

Analysing the GDP Growth of leading economies over the years

The analysis covers four distinct time periods:

Pre-Pandemic Years (2018, 2019)

Pandemic Years (2020, 2021)

Post-Pandemic Years (2022, 2023)

Futuristic Outlook Years (2024, 2025)

• India secured the second rank in both the Pre-Pandemic Years (2018, 2019) and the Pandemic Years (2020, 2021).
• However, it clinched the top position in both the Post-Pandemic Years (2022, 2023) and Futuristic Outlook Years (2024, 2025) among the top 10 economies.

“According to experts, the markets are anticipated to maintain resilience and reach new highs in 2024. The Nifty 50 index and SENSEX are expected to surpass 25,000 and 75,000, respectively, benefiting from ongoing government reforms aimed at fostering growth in various promising sectors of the Indian economy,” stated by the industry body PHDCCI.

Ranjeet Mehta, Executive Director of the PHD Chamber of Commerce and Industry, added, “India's economic journey reflects a nation overcoming challenges, implementing strategic reforms, and showcasing resilience across diverse sectors. The convergence of geopolitical stability, economic resilience, sectoral growth, and technological advancements paints a promising picture of India's role in the ever-evolving global economic landscape.”

Highlighting the key growth factors contributing to India’s economy, Dr SP Sharma, Chief Economist, and Deputy Secretary-General of the PHD Chamber of Commerce and Industry said, “India's economy has displayed remarkable resilience, rebounding from unprecedented challenges, including the effects of the COVID-19 pandemic and the global headwinds. High GDP growth projections from the IMF and other reputed organisations indicate strong growth, with India outpacing other leading economies.”

The report also identified the most promising sectors for India’s GDP growth are:

• Agriculture and food processing
• Infrastructure
• Textile and Apparels
• Pharmaceutical
• Defence
• Manufacturing
• Electronics
• Fintech.

Furthermore, some of the risks affecting India's economy include deepening geopolitical developments, fragmentation in commodity markets, and inflationary pressures.

Interestingly, a recent report by the World Bank also projected India to remain resilient as the global economy is heading towards its weakest growth in three decades. The most affected nations expected to see a decline in their economy are North America, Europe, Central Asia, and the Asia-Pacific regions. These projections, coming just in time as Finance Minister Nirmala Sitharaman is set to announce India's Union Budget next month, may indicate the sectors in which India needs to invest to prosper economically.