In a notable forecast, Jefferies, a global financial powerhouse, envisions India’s ascent to become the third-largest economy globally by 2027, outpacing stalwarts like Japan and Germany. This forward-looking perspective is anchored in India’s consistent economic growth, positive geopolitical standing, expanding market valuation, ongoing reform initiatives, and a robust corporate ethos.
Over the past decade, India’s Gross Domestic Product (GDP) has shown unwavering growth, clocking a 7 percent annual increase in USD terms and reaching an impressive $3.6 trillion. This upward trajectory has propelled India from the eighth-largest to the fifth-largest economy on the global stage. Jefferies projects that within the next four years, India’s GDP could surge to $5 trillion, firmly establishing it as the third-largest global economy.
Mahesh Nandurkar, an analyst at Jefferies, underscores pivotal factors contributing to India’s climb. These include a dependable and abundant labor force, favorable demographics, fortified institutional frameworks, and governance enhancements. The historical growth rate of 10-12 percent in USD terms over the last two decades lends substantial credence to this optimistic outlook.
Currently holding the fifth position in the global equity market, India is poised for further expansion, with Jefferies estimating a market valuation reaching $10 trillion by 2030. Ongoing economic reforms are anticipated to uphold India’s standing as the fastest-growing large economy. Notably, domestic investment trends are contributing to market stability, while a relatively modest level of foreign ownership acts as a safeguard against valuation volatility.
Nandurkar highlights the robustness of India’s corporate sector, emphasizing that 167 companies boast a market capitalization exceeding $5 billion. This diversity within the corporate landscape provides a plethora of investment opportunities, aligning seamlessly with a strategy focused on Return on Equity (RoE).
Jefferies’ optimistic foresight reflects a profound confidence in India’s economic journey, melding internal strengths with external factors to position the country as a potent force in the global economic arena. The projection not only signals growth but anticipates a transformative impact on the global economic landscape by India.
