Source: ET
Context:
According to the August 2025 issue of EY Economy Watch, India’s economic trajectory remains robust despite global uncertainties. The report projects India to emerge as the second-largest economy by 2038, supported by strong domestic fundamentals.
Key Highlights of the Report:
- Growth Projections:
- $20.7 trillion GDP (PPP) by 2030
- $34.2 trillion GDP (PPP) by 2038, making India the 2nd-largest economy globally.
- Economic Strengths:
- High savings and investment rates.
- Favourable demographics (youth-driven workforce).
- Sustainable fiscal position.
- Strong domestic demand and advancement in modern technologies.
- Global Challenges and Mitigation:
- US tariffs on Indian imports could impact growth, but adverse effects can be limited to 10 basis points with proper countermeasures.
- Resilience driven by domestic consumption rather than external trade reliance.
Significance:
- Positions India as one of the most dynamic among the world’s top five economies.
- Reinforces India’s potential as a global growth engine in the coming decades.
- Highlights the need for policy measures to counter external risks and leverage demographic advantages.
