India’s GDP to Reach $5.7 Trillion, Becoming Third Largest by 2028: Morgan Stanley

According to Morgan Stanley, India’s GDP is projected to expand to $5.7 trillion by fiscal 2028, making it the third-largest economy in the world, surpassing Germany and Japan. Currently the fifth-largest economy, India is expected to overtake Japan by 2026 to become the fourth-largest. The country’s share in global GDP is set to rise from 3.5% in 2023 to 4.5% in 2029, driven by strong macroeconomic policies, improved infrastructure, and a growing consumer market. The report also outlines different growth scenarios, with GDP potentially reaching $10.3 trillion by 2035 in a bullish case.

Key Highlights

Projections

• India’s Current Position: The fifth-largest economy after the US, China, Germany, and Japan in 2023.
• Growth Projection: GDP is expected to rise from $3.5 trillion in 2023 to $4.7 trillion in 2026, overtaking Japan to become fourth-largest.
• By 2028: India will surpass Germany, reaching $5.7 trillion, making it the third-largest economy after the US and China.

Historical Position

• 1990 – 12th largest economy
• 2000 – 13th position
• 2020 – 9th position
• 2023 – 5th position

Global Share of GDP

• Expected to increase from 3.5% in 2023 to 4.5% in 2029.

Projected GDP Growth by 2035

• Bearish Scenario – $6.6 trillion
• Base Scenario – $8.8 trillion
• Bullish Scenario – $10.3 trillion

Per Capita GDP Projection (2025–2035)

• 2025 – $2,514
• 2035 (Bearish) – $4,247
• 2035 (Base) – $5,683
• 2035 (Bullish) – $6,706
• Middle-Income Status – Still below $10,000, meaning India won’t reach middle-income status even in the bullish case.

Factors Driving Growth

• Macroeconomic stability and policy support
• Improved infrastructure
• Growing entrepreneurial sector
• Rising manufacturing contribution
• Increasing credit-to-GDP ratio
• Energy transition and digital growth

Short-Term Growth

• FY 2025 GDP growth – Expected at 6.3%
• FY 2026 GDP growth – Expected at 6.5%