India is on course to become the third largest economy in the world by 2027, after the U.S. and China, two years ahead of the target.

India will claim third place as Japan and Germany, currently in third and fourth place, fall down the rankings.

According to the findings from the International Monetary Fund’s (IMF) October World Economic Outlook report, India - currently in fifth place after beating the UK recently – is growing faster than other G20 economies, except Saudi Arabia. 

Indeed, between April 2021 and March 2022, India’s GDP rose by 8.7%.

The IMF downwardly revised India’s 2022 GDP forecast to 6.8% from 7.4% in July and 8.2%, “reflecting a weaker-than-expected outturn in the second quarter and more subdued external demand,” but held the 6.1% forecast for 2023-2024, the steepest growth projection among the G20 nations.

In regard to GDP per capita, India is predicted to reach $3,652 in 2027 compared to $2,466 in 2022. In addition, with the birth rate in China in decline, India is also forecast to become to most populous nation in the world by 2023.

Driving India’s economic growth in the coming years will be merchandise and services exports, say reports. Between April and September this year, India’s exports rose 16.96%, as per data from the commerce industry.

India’s Commerce and Industry Minister Piyush Goyal is confident the country will reach its $2 trillion export target for goods and services by 2030, and forecasts India will become a $30 trillion economy, with a 25% share in exports, by 2047.

Last month, inflation in the country rose to 7.4%, a five-month high. Although it remains elevated, it is far from levels seen in the United States and European Union. Furthermore, the country’s banking sector is in a strong position as the credit cycle rallies.