India has experienced a significant structural change since 2014 and has surpassed the United Kingdom to become the world’s fifth-largest economy. At its present rate of growth, India will likely exceed Japan by 2029 and surpass Germany in 2027, according to a study by the State Bank of India (SBI).
Curiously, India overtook the UK as the world’s fifth-largest economy in December 2021. According to a study by the State Bank of India’s Economic Research Department, India’s trajectory since 2014 indicates that it is expected to be rated as the third largest economy in 2029, a rise of 7 spots from 2014 when India was placed 10th.
“Nevertheless, we make a passionate urge to update the IIP basket that is composed of a 2012 set of products and is hopelessly outdated. For example, the IIP basket does not contain handset exports that are now produced by companies like Foxconn in India. Separately, the steel production by select companies has undergone locational shifts which are not a part of the IIP sample. Nokia’s handset manufacturing facility at Chennai has closed down post-2014. Hilariously, the facility is now producing 5G Radio sets. We believe that manufacturing growth in India will see an upward revision once this is done,” it said.
According to the SBI report, India’s GDP contribution is already 3.5%, up from 2.6% in 2014, and is expected to reach 4% in 2027, which is currently Germany’s proportion of the global GDP.
“In the coming days India is likely to be the beneficiary as China slows down in terms of new investment intentions. Global tech major Apple’s recent decision to shift part production of its flagship iPhone 14 model for worldwide shipping from India, with a negligible time lag of a few weeks post its slated launch on September 7, bears testimony to such optimism! The move by Apple, the most recognisable face of tech-infused innovation in the last two centuries, that captures aspirations of an upwardly mobile population should open the floodgates for other major conglomerates to follow suit.
Beginning the twenty-first century with the second-largest economy, China started on an accelerated growth path. According to SBI study, the correct policy perspective and a realignment in global geopolitics, our current forecasts might even experience an upward adjustment.