India set to pip Germany, Japan to become world's third largest economy by 2029: SBI Research

India is likely to become the third largest economy in the world by 2029, a research paper of SBI said on Saturday. India has already overtaken the UK to become the fifth largest economy. The paper said that India has undergone a large structural shift since 2014 and is now the 5th largest economy. It said India had surpassed the UK as the 5th largest economy as early as December 2021 itself and not recently.

The research paper further stated that the share of India's GDP is now at 3.5 per cent, as against 2.6 per cent in 2014 and is likely to cross 4 per cent in 2027, the current share of Germany in global GDP. The path taken by India since 2014 reveals India is likely to get the tag of 3rd largest economy in 2029, a movement of 7 places upwards since 2014 when India was ranked 10th, it said. 

"India should surpass Germany in 2027 and most likely Japan by 2029 at the current rate of growth. This is a remarkable achievement by any standards," it said. 

Referring to recent GDP growth number which was 13.5 per cent, the paper said that India is likely to be the fastest growing economy in the current fiscal. "Interestingly, even as estimates of India’s GDP growth rate for FY23 currently range from 6.7 per cent to 7.7 per cent, we firmly believe that it is immaterial. In a world that is ravaged by uncertainties, we believe 6-6.5 per cent growth is the new normal," the paper said.

In coming days, the paper further stated, 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 an optimism," it said. The move by Apple, the paper said, should open the flood gates for other major conglomerates to follow suit.

According to the report, a broad-based growth of empowerment will also lift India's per capita income from current levels and this could also as a force multiplier.