Indian economy to overtake Japan by 2030, consumption to double, says new report

January 17, 2022

NEW DELHI -- India is likely to overtake Japan as Asia's second-largest economy by 2030 when its GDP is also projected to surpass that of Germany and the U.K. to rank as the world's No.3, according to a report released by IHS Markit.

Currently, India is the sixth-largest economy, behind the US, China, Japan, Germany and the U.K.

"India's nominal GDP... is forecast to rise from US$2.7 trillion in 2021 to US$8.4 trillion by 2030," IHS Markit said. "This rapid pace of economic expansion would result in the size of Indian GDP exceeding Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region."

By 2030, the Indian economy would also be larger in size than the largest Western European economies of Germany, France and the U.K.

The HIS Markit report says the long-term outlook for the Indian economy is supported by a number of key growth drivers.

"An important positive factor for India is its large and fast-growing middle class, which is helping to drive consumer spending," IHS Markit said, forecasting that consumption expenditure will double from US$1.5 trillion in 2020 to US$3 trillion by 2030.