India is poised to become the world’s third-largest economy by 2027, according to Dr Gita Gopinath, Deputy Managing Director of the International Monetary Fund (IMF). Her remarks follow Prime Minister Narendra Modi's Independence Day address, in which he highlighted India's progress towards this goal, citing major reforms across various sectors.
Currently the fifth-largest economy globally, India is on the verge of joining the top three economic powers, driven by robust growth across multiple industries. Gopinath noted that India’s economic performance exceeded expectations in the last fiscal year (FY24), with a significant recovery in private consumption, particularly in the rural economy.
“The rural economy is seeing a resurgence, with better monsoons leading to improved harvests and higher agricultural incomes,” Gopinath was quoted as saying in media reports.
Recent data from the Society of Indian Automobile Manufacturers (SIAM) shows that production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles reached 2,437,138 units in July. The two-wheeler segment saw a 12.5% growth compared to the same period last year.
The fast-moving consumer goods (FMCG) sector also remains strong despite challenges. According to market research firm Kantar Worldpanel, the FMCG sector is expected to grow by 6.1% in the rural market in FY 2024-25, up from 4.4% last year. The rural FMCG market is becoming increasingly valuable, now generating nearly half of the sector's volume and value.
Gopinath also emphasised the need for India to create millions of additional jobs in the next 5-6 years to sustain its growth momentum.
The IMF has raised its economic growth forecast for India to 7% for FY25, up from the 6.8% projected in April. Reserve Bank of India (RBI) Governor Shaktikanta Das noted that India’s average growth over the past three years stands at 8.3%, with a projected growth of 7.2% for the current year.
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