India has the conditions in place for an economic boom fuelled by investments in manufacturing, the energy transition, and the country’s advanced digital infrastructure and these drivers will make it the world’s third-largest economy and stock market before the end of this decade ending 2030, said global investment bank Morgan Stanley in a report.
The report titled ‘Why This Is India’s Decade’ looked at the trends and policies shaping the future of India’s economy.
“As a consequence, India is gaining power in the world economy, and in our opinion, these idiosyncratic changes imply a once-in-a-generation shift and an opportunity for investors and companies,” it said.
The four global trends — demographics, digitalization, decarbonization and deglobalization are favouring what it termed as New India. It said India would drive a fifth of global growth through the end of this decade.
The number of households earning in excess of USD 35,000/year is likely to rise fivefold in the coming decade, to over 25 million.
The implications of the rising household earnings are GDP likely to more than double to USD 7.5 trillion by 2031, a discretionary consumption boom, and an 11 per cent annual compounding of market capitalization to USD 10 trillion in the coming decade.
India’s per-capita income, it said, would rise from USD 2,278 now to USD 5,242 in 2031, setting the stage for a discretionary spending boom.
The number of global in-house captive centers that opened in India over the last two years was almost double that of the prior four years.
During the two pandemic years, the number of people employed in this industry in India rose from 4.3 million to 5.1 million, and the country’s share of global services trade rose 60 basis points to 4.3 per cent, it said.
In the coming decade, the number of people employed in India for jobs outside the country is likely to at least double to over 11 million, and the report estimates global spending on outsourcing could rise from USD 180 billion per year to around USD 500 billion by 2030.
This, the report said, will have significant effects on both commercial and residential real estate demand.