Our Bureau
New Delhi
India is emerging as one of the world’s fastest-growing economies and could become the second-largest in PPP terms by 2038, with a projected GDP of USD 34.2 trillion, according to a report by EY. The study highlights that, despite global uncertainties and higher tariffs imposed by the United States, India’s economic trajectory remains robust.
By 2030, India’s economy is expected to touch USD 20.7 trillion in purchasing power parity (PPP) terms. The IMF estimates its GDP for FY25 at USD 14.2 trillion (PPP), making it the world’s third-largest economy after the US and China — more than three and a half times larger than when measured in market exchange rate terms.
On the issue of US tariffs, EY said India could minimize the fallout through countermeasures. The potential reduction in real GDP growth may be limited to about 10 basis points, lowering medium-term growth from 6.5% to 6.4% in FY26.
The report attributes India’s resilience to its strong domestic demand and growing strength in modern technologies. It notes that, if India and the US sustain average growth rates of 6.5% and 2.1%, respectively, from 2028 to 2030, India could overtake the US in PPP terms by 2038. Moreover, India is projected to surpass Germany in 2028 to become the world’s third-largest economy in market exchange rate terms.
