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%
Summary/Static | Details |
Why in the news? | India’s GDP to Reach $5.7 Trillion, Becoming Third Largest by 2028: Morgan Stanley |
India’s GDP in 2023 | $3.5 trillion |
Projected GDP (2026) | $4.7 trillion (4th largest, overtaking Japan) |
Projected GDP (2028) | $5.7 trillion (3rd largest, overtaking Germany) |
Global GDP Share (2029) | 4.5% (up from 3.5%) |
Projected GDP (2035) | $6.6T (Bear), $8.8T (Base), $10.3T (Bull) |
Per Capita GDP (2025) | $2,514 |
Per Capita GDP (2035) | $4,247 (Bear), $5,683 (Base), $6,706 (Bull) |
Middle-Income Threshold | $10,000 (India still below this in 2035) |
Short-Term Growth (FY 2025-26) | 6.3% (2025), 6.5% (2026) |
Factors Driving Growth | Policy stability, infrastructure, entrepreneurship, manufacturing, energy transition |