India to Become $7 Trillion Economy By 2030; Set to Emerge As 4th Largest Economy by 2026: PHDCCI

PHDCCI highlights India’s strong performance across key economic indicators, projecting it will reach USD 34 trillion by 2047. Reports ETV Bharat’s Surabhi Gupta.

New Delhi: India is poised to emerge as an economic powerhouse, demonstrating unmatched resilience amidst global challenges as per the latest report of the PHD Chamber of Commerce and Industry (PHDCCI). The PHDCCI has highlighted India’s 'stellar' economic performance in its report, ‘New Year Economics: PHDCCI Economic Outlook 2025.’ According to the report, India’s GDP is projected to surpass USD 4 trillion in 2025, positioning the country as the fourth-largest economy by 2026.

The comprehensive analysis by the PHD Research Bureau evaluates India’s economic strength across five key macroeconomic indicators, GDP growth, exports, savings, investments, and debt-to-GDP ratio, showcasing India’s impressive rise among the world’s top 10 economies.

India’s Economic Performance: A Beacon of Resilience

In an exclusive interaction with ETV Bharat, Dr. S.P. Sharma, Chief Economist and Deputy Secretary General of PHDCCI, shared key insights from the report. He expressed optimism about India’s growth trajectory, “India is outperforming the world’s leading economies across five key parameters, GDP growth, exports, investments, savings, and debt-to-GDP ratio. This consistent performance, supported by government initiatives and robust private sector participation, has made India a global bright spot. By 2030, India will be a USD 7 trillion economy, growing to USD 10 trillion by 2034 and an incredible USD 34 trillion by 2047.”

Dr. Sharma emphasized the importance of structural reforms and policy measures that have strengthened India’s economic foundation. He attributed India’s success to fiscal prudence, external sector resilience, and strategic government initiatives aimed at fostering growth and sustainability.

“India has maintained its top ranking in GDP growth from 2022 to 2024 and is projected to continue this momentum through 2025 to 2027. Our exports are gaining global traction, and we are on track to achieve our ambitious target of USD 2 trillion exports by 2030. These indicators reflect the strength of India’s domestic economy and its growing importance in the global growth trajectory,” he added.

Driving Forces Behind India’s Growth

Dr. Ranjeet Mehta, CEO and Secretary General of PHDCCI, told ETV Bharat, “India’s economy has demonstrated remarkable resilience, even during challenging times. Our analysis shows that the Indian economy has performed exceptionally well over the past three years across all major economic indicators. This gives us optimism for the future, with GDP growth projected at 6.8% in FY 2024-25 and 7.7% in FY 2025-26.”

Dr. Mehta pointed out that India’s savings and investments are expected to remain at 32% and 33% of GDP, respectively, over the coming years. These robust levels underscore the government’s commitment to fostering an investor-friendly ecosystem and ensuring financial stability.

He added, “India has become a preferred destination for foreign direct investment (FDI), crossing cumulative inflows of USD 1 trillion in 2024. Nearly 70% of this FDI has been accumulated in the last decade, thanks to proactive policy measures and liberalized FDI guidelines. These investments have further bolstered India’s economic resilience and competitiveness on the global stage.”

Strategic Policy Recommendations

To sustain this growth momentum, Dr. Mehta outlined a five-pronged strategy that the PHDCCI has proposed:

1. Increased Capital Expenditure: Continued investments in infrastructure and industrial development to fuel economic growth.

2. Ease of Doing Business: Streamlining regulatory processes to enhance business efficiency and attract investments.

3. Reducing the Cost of Doing Business: Addressing high tax rates and other operational inefficiencies to make India more competitive globally.

4. Labor-Intensive Manufacturing: Encouraging industries that create employment opportunities and contribute to exports.

5. Global Value Chain Integration: Strengthening India’s role in international trade and supply chains to drive long-term growth.

Dr. Mehta stressed the importance of aligning India’s growth trajectory with its vision of Viksit Bharat@2047, “Our roadmap emphasizes sustainability, inclusivity, and innovation. By focusing on these priorities, India can not only achieve but surpass its long-term goals, cementing its position as a global economic leader.”

Inflation and Fiscal Management

Inflation management has been a critical focus area for the Indian government. Dr. Sharma highlighted the PHDCCI’s projections for inflation, “The Consumer Price Index (CPI) inflation is expected to average around 4.5% in FY 2024-25 and decline further to 4% in FY 2025-26. This indicates effective fiscal and monetary measures by the government. We are also hopeful that the next monetary policy review will bring a 25-basis-point cut in interest rates, providing further impetus to economic growth.”

Dr. Sharma also touched upon the issue of taxation, suggesting reforms to boost consumption and reduce the burden on middle-income group, “Currently, middle-income earners with an annual income of Rs 15 lakh face peak tax rates. We recommend increasing the threshold to Rs 40 lakh and capping the peak rate at 25%. These measures will align India’s tax regime with advanced economies and support domestic consumption.”

Sectoral Opportunities and Global Positioning

The PHDCCI report identifies five high-growth sectors that will drive India’s economic expansion in the coming years:

1. Agriculture and Food Processing: Enhancing productivity and exports in the agri-sector.

2. Fintech: Leveraging India’s digital ecosystem to drive innovation in financial services.

3. Semiconductors: Boosting domestic manufacturing to reduce reliance on imports.

4. Health and Insurance: Expanding healthcare access and insurance coverage.

5. Renewable Energy: Strengthening India’s position as a global leader in green energy.

Dr. Mehta emphasized the importance of these sectors, “These sectors are poised to contribute significantly to India’s economic growth, employment generation, and export potential. By capitalizing on these opportunities, India can reinforce its position as a global economic powerhouse.”

India’s Leadership Among Top Economies

The PHDCCI report underscores India’s remarkable performance compared to the world’s leading economies. Dr. Sharma remarked, “India’s economic resilience and strategic vision make it a leader among the world’s top 10 economies. Our focus on innovation, structural reforms, and sustainability ensures that India remains a global bright spot for decades to come.”

Dr. Mehta said, “India is not only poised to become the fourth-largest economy by 2026 but is also well on its way to achieving the vision of Viksit Bharat@2047. With prudent policies, a dynamic private sector, and a supportive government, India’s economic future shines brighter than ever.”