India overtook the UK to become the fifth largest economy in 2022 and continues to be at the fifth position with a GDP of USD 3.75 Trillion. India overtook France in 2019, with a gap of around USD 100 billion and successfully widened this gap to USD 210 billion in 2021. In 2018, both the economies were tied with an annual GDP of around USD 2.7 trillion. In addition to this, overall India has increased its share in the global GDP by nearly one percentage point since 2014 when it was at the tenth position in the global economy. Projections also indicate this percentage is likely to rise to around 4 per cent from the current 3.5 percent by 2027, helping India overtake Germany’s position in the global economy.
Despite the ongoing global economic slowdown, India is likely to be the fastest growing economy in this fiscal year. The country’s GDP growth rate for the first quarter of the 2022-23 financial year has been at an impressive 13.5 per cent. A State Bank of India report also predicts that the overall growth rate of the Indian economy for the current financial year is likely to stand between 6.7-7.7 per cent. The report also estimated that India will be the third-largest economy by 2029. In terms of purchasing power parity (PPP), India has continued to be the third-largest economy in the world in 2023. India stands at USD 10.22 trillion, which was twice the size of Japan. Japan was the fourth largest economy in the world in PPP terms, with a USD 5.4 trillion economy. Despite the global slowdown, exports from India have performed well, with India’s services exports skyrocketing by 30% between April and February.
The country’s performance in other economic indicators has also been very positive in the past few months. India’s private equity-venture capital (PE-VC) sector investments stood at USD 2 billion in September 2022. The country recorded a cumulative foreign direct investment (FDI) equity inflow of USD 604,966 million from April 2000-June 2022. In September 2022, the merchandise exports of the country stood at USD 32.62 billion, while the gross Goods and Services Tax (GST) revenue collection stood at USD 17.92 billion. In August 2022, the overall IIP (Index of Industrial Production) stood at 131.3. The Indices of Industrial Production for the mining, manufacturing and electricity sectors stood at 99.6, 131.0 and 191.3, respectively, in August 2022. In addition to this, the country’s Purchasing Managers Index remained comfortably in the expansionary zone at 56.7 from April-September 2022. According to a report by management consulting firm Kearney and the World Economic Forum, by 2030, India is projected to have the world’s largest labour force and could contribute more than USD 500 billion annually to the global economy.