India to Become the World's Third-Largest Economy, Surpassing Japan and Germany

India is set to surpass Japan and Germany, becoming the world's third-largest economy, according to S&P Global and Morgan Stanley.

S&P's conclusion is based on the forecast that India's nominal GDP will grow at an annual rate of 6.3 percent until 2030. Morgan Stanley estimates that India's GDP will likely more than double from current levels by 2031.

"India has the conditions for economic growth driven by offshoring, investments in manufacturing, energy transition, and advanced digital infrastructure," wrote Morgan Stanley analysts, led by Ridhima Desai and Girish Achipaliya, in their report. "These factors will position India as the world's third-largest economy and stock market by the end of the decade."

India reported a 6.3 percent year-on-year growth for the July-September quarter, slightly above the 6.2 percent forecast in a Reuters poll. Prior to this, India had recorded a remarkable 13.5 percent growth in April-June compared to the previous year, supported by strong domestic demand in the country's services sector. According to Refinitiv data, the country recorded unprecedented growth of 20.1 percent year-on-year by June 2021.