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  • Writer's pictureShivaji Lokam

Indian Economy in Trillion US Dollars

Updated: Apr 28, 2022

India is expected to overtake Japan before reaching 2030 as Asia's second-largest economy, surpassing Germany and the United Kingdom to become the world's third-largest economy. India is currently the world's sixth-largest economy, behind the United States, China, Japan, Germany, and the United Kingdom.

"India's nominal GDP is expected to increase from $2.7 trillion in 2021 to $8.4 trillion by 2030," according to the report. "With this rapid economic growth, Indian GDP will surpass Japanese GDP by 2030, making India the second-largest economy in the Asia-Pacific region." By 2030, India's economy is predicted to be larger than Germany, France, and the United Kingdom, the three largest Western European economies.

Several key growth drivers support the Indian economy's long-term prospects. "An important positive factor for India is its large and rapidly growing middle class, which is helping to drive consumer spending," according to IHS Markit, which predicts that the country's consumption expenditure will double from $1.5 trillion in 2020 to $3 trillion in 2030.

India's real GDP growth rate is expected to be 8.2 percent for the full fiscal year 2021-22, rebounding from a severe contraction of 7.3 percent year-on-year in 2020-21. The Indian economy is expected to grow at a robust pace of 6.7 percent in the fiscal year 2022-23.

Due to its rapidly growing consumer market and large industrial sector, India has become an increasingly important investment destination for multinationals in many sectors, including manufacturing, infrastructure, and services.

The current fiscal year is expected to see India's economy grow by 9.2%, aided by a strong farm sector and a strengthening recovery in manufacturing, construction, and services. Still, the third Covid wave could slow growth in the months ahead.

If the 9.2% growth is achieved, it will be the fastest since the economy grew 9.6% in 1988-89. It would be the quickest expansion under the new methodology, for which data is available for 17 years. The nominal GDP (inflation included) is estimated to be 17.6%. Based on current prices, the economy is estimated to be $3.1 trillion in dollar terms.

According to the World Bank, India's GDP increased to $2.9 trillion in current dollar terms in 2019 before falling to $2.7 trillion in 2020 due to Covid's impact. This growth rate would also help it maintain its position as the world's fastest-growing major economy. After the bruising impact of the strictest lockdown imposed to prevent the spread of the coronavirus, the economy has recovered, with a record 24.4 percent contraction in the June quarter of 2020-21.

The National Statistics Office's (NSO) GDP estimates are slightly lower than the Reserve Bank of India's (RBI) forecast of a 9.5 percent economy. According to the International Monetary Fund (IMF), it is also expected to expand along similar lines, according to the International Monetary Fund (IMF). However, the third wave of the pandemic, led by the Omicron variant, has hampered recovery growth and strength. Several economists have lowered their full-year GDP growth forecasts, predicting that state-level restrictions will impact businesses and growth in the months ahead.

The NSO also warned that the 9.2% GDP growth estimate in the first advance estimates does not account for several factors and that the impact of government policies could lead to revisions.

"However, these are preliminary estimates for the years 2021-22. "Future revisions of these estimates will be based on the actual performance of various indicators, actual tax collections and expenditure on subsidies in the coming months. new help and relief measures for the vulnerable and weak sections (such as providing free food grains, which has now been extended until March 2022) and other measures, if any, taken by the government to contain the spread of Covid-19," the NSO said in its statement.

"Because the estimate does not account for the Covid effect, there may be a downward bias to this number," said Madan Sabnavis, Bank of Baroda's chief economist.

"Based on this data, the RBI is likely to maintain its previous stance and not change any of the rates." The accommodative stance will be maintained, with the reverse repo rate hike being postponed. "Unless the inflation number to be released turns out to be very high, which does not appear likely," Sabnavis said, "the possibility of lockdowns will ensure that an easy liquidity policy is pursued."

The First Revisional Estimate of GDP for 2019-20 is 145.69 lakh crore, while the Real GDP or Gross Domestic Product (GDP) does not change (2011-12) prices for 2020-21 is estimated at 135.13 lakh crore. GDP growth is expected to be -7.3 percent in 2019-20. Nominal GDP, or GDP at current prices, is expected to reach 197.46 lakh crore in 2020-21, down from the First Revised Estimates of 203.51 lakh crore in 2019-20, indicating a 3.0% decrease.

GVA (Gross Value Added), GNI (Gross National Income), and NNI (Net National Income) are estimated to be 124.53 lakh crore, 133.85 lakh crore, and 117.46 lakh crore, respectively, at constant prices in India. These figures are 179.15 lakh crore, 195.61 lakh crore, and 174.62 lakh crore, respectively, at current prices.

Since 2004-05, figures have been available in the new series. Since 2004-05, India's GDP has increased by 2.47 times.

India's nominal GDP in 2021 is projected to be $3,050 billion at current prices, according to the IMF Economic Outlook of the world (April - 2021). According to this forecast, India will be the world's sixth-largest economy, down from fifth place in 2019. India was ranked 5th highest in 2019 and 17th lowest in 1991. India accounts for 3.25 percent of the global GDP. India's economic share of the global economy has risen from 1.08 percent in 1993 to 3.27 percent in 2019.

After China and Japan, India is the third-largest Asian country. India accounts for roughly 9% of Asia's total GDP (nominal).

According to PPP, India's economy will be worth $10,207 billion in 2021, ranking third in the world; after the United States and China. India is responsible for 7.19 percent of global GDP (PPP). India accounts for over 16% of Asia's total GDP (PPP). India's GDP at purchasing power parity (PPP) is 3.35 times that of the country's nominal GDP.

In nominal terms, the Indian economy surpassed the $1 billion mark in 2007 and the $2 billion mark in 2014. In terms of purchasing power parity, India passed the one billion mark in 1990. Since 1960, when the country's GDP was 37 million dollars, estimates from the World Bank have been available. The best period for the Indian economy was 2002-19 when the country's economy grew by 458 percent in 17 years.

In conclusion, with the rapid increase in the country's GDP, India's economy will rise exponentially in the upcoming years. Study growth in GDP, business, and market. The predictions based on the fiscal deficit released by the government promise the country a rise in the economy. So, even though the country is affected by the 3rd wave of covid and the markets could take a hit because of the current situation, economic growth is inevitable.

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