Indian Economy GDP Poised to Reach $6.7 Trillion in FY31, says S&P

From FY24 to FY31, the Indian economy is expected to grow at a rate of 6.7% per year. According to S&P, India's GDP will more than double to $6.7 trillion in FY31 from $3.4 trillion in FY23. It goes on to say that per capita GDP will rise to around $4,500.

The report went on to say that, unlike the East Asian economies, India would have to forge its own path. Capital accumulation, as well as government and private sector investment in infrastructure and manufacturing, will drive India's growth. S&P emphasised the importance of digital infrastructure in driving growth.

However, India's success will be determined primarily by its ability to "reap its demographic dividend; increase labour force participation, including upskilling; boost private investment through structural reforms in land, logistics, and labour; and increase competitiveness through foreign direct investment." According to the report, geopolitics could also provide significant tailwinds.

According to the report, India's consumer market will more than double by 2031, rising to $5.2 trillion from $2.3 trillion in 2022. According to the report, consumer spending on food will rise to $1.4 trillion by 2031 from $615 billion in 2022, while spending on financial services will rise to $670 billion from $280 billion. Higher per capita incomes will increase discretionary spending in areas such as entertainment, communications, restaurants, and hotels.