India's Economic Growth and Global Position
India is projected to experience significant economic growth with its GDP reaching USD 20.7 trillion in purchasing power parity (PPP) terms by 2030. By 2038, India may emerge as the second-largest economy with a GDP of USD 34.2 trillion.
Factors Contributing to Economic Resilience
- India's economy is supported by strong fundamentals such as:
- High savings and investment rates
- Favorable demographics
- A sustainable fiscal position
- India relies on domestic demand and advances in modern technologies, which contribute to its economic resilience.
Comparative Economic Analysis
- As of FY25, India's GDP in PPP terms is estimated at USD 14.2 trillion, making it the third-largest economy globally after China and the US.
- India is expected to surpass the US in PPP terms by 2038, contingent on maintaining growth rates of 6.5% for India and 2.1% for the US between 2028-2030.
- By 2028, India is projected to overtake Germany as the third-largest economy in market exchange rate terms.
Impact of US Tariffs on India
- Sectors impacted include textiles, gems and jewelry, shrimp, leather, chemicals, and machinery.
- Pharma, energy products, and electronic goods remain unaffected by these duties.
- Strategies to counteract tariffs include:
- Diversifying exports to other countries
- Boosting domestic demand for export goods
- Reducing overall imports
