India Set To Pip Germany, Japan To Become World's 3rd Largest Economy By 2029: Report

The report of the Department of Economic Research of SBI said that India's GDP growth rate stood at 13.5% in the first quarter of the current financial year.

A worker uses the hand block printing technique on a cotton fabric at the workshop (Source: File photo/AFP)

New Delhi: India's gross domestic product (GDP) is expected to surpass Germany and Japan to become the world's third-largest economy, according to the Department of Economic Research, State Bank of India (SBI). The report said that while India was ranked tenth economically in 2014, by 2029, India could jump seven places to the third position, as reported by news agency ANI.

India is likely to get the tag of the 3rd largest economy in 2029, a movement of 7 places upwards since 2014 when India was ranked 10th, stated Research Report from the State Bank of India’s Economic Research Department pic.twitter.com/MmaAv6kCHk

— ANI (@ANI) September 3, 2022

The report of the Department of Economic Research of SBI said that India's GDP growth rate stood at 13.5% in the first quarter of the current financial year. If this momentum continues, the Indian economy will be the fastest growing economy in this financial year.

On the projections for the Indian economy to grow from 6.7% to 7.7% during the current financial year, the report said that this is good. Where there is a threat of recession all over the world, the growth rate of 6% to 6.5% is the 'New Normal'.

However, this report of SBI has strongly advocated for updating the IIP (Index of Industrial Production) basket. Reportedly it is based on 2012 products so is disappointingly out of date.

According to the IMF projections, India has overtaken the UK to become the world's fifth-largest economy and is now behind only the US, China, Japan and Germany on Saturday.

The assumption of India overtaking the UK is based on calculations by Bloomberg using the IMF database and historic exchange rates on its terminal.

"On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in 'nominal' cash terms in the quarter through March was USD 854.7 billion. On the same basis, the UK was USD 816 billion," stated a Bloomberg report.

With India being the world's fastest-growing major economy, its lead over the UK will widen in the next few years.

"Proud moment for India to pip the UK, our colonial ruler, as the 5th largest economy: India $3.5 trillion vs UK $3.2 trillion. But a reality check of population denominator: India: 1.4 billion vs UK 0.068 billion. Hence, per capita GDP we at $2,500 vs $47,000. We have miles to go... Let's be at it!," Uday Kotak, CEO of Kotak Mahindra Bank, said in a tweet.

(With PTI Inputs)