Mumbai: India is on track to become the third-largest economy by fiscal 2030-31, driven by a robust projected annual growth rate of 6.7 per cent, a report by S&P Global projected on Thursday.  

The country has emerged as the fastest-growing large economy at an 8.2 per cent growth rate in FY24, significantly exceeding the government’s earlier estimate of 7.3 per cent.

According to the report, Infrastructure development and geopolitical strategies will play an important role in maximising trade benefits.

"India’s medium-term prospects are healthy and filled with opportunities in multiple sectors including trade, agriculture, and AI, likely structural reforms and growing energy demands," said Abhishek Tomar, Head-S&P Global India Leadership Council.

India is poised for growth, and with a young and dynamic workforce well-positioned to shape, added Tomar, also Chief Data Officer for S&P Global Market Intelligence.

According to the report, titled "India Forward", continued reforms are crucial to improving business transactions and logistics, boosting private sector investment, and reducing reliance on public capital. The equity markets are expected to stay dynamic and competitive due to strong growth prospects and better regulation.

The report also mentioned that foreign inflows into Indian government bonds have surged since the country joined major emerging market indexes, with further growth anticipated.

"To maximise trade benefits, India must develop infrastructure and geopolitical strategies, particularly regarding its extensive coastline. Nearly 90 per cent of India’s trade is seaborne, necessitating robust port infrastructure to manage increasing exports and bulk commodity imports," it noted.

The country can further look to sustainable technologies, including renewables and low-emission fuels balancing energy security with its energy transition plans. Agriculture will rely on advanced technologies and new policies to improve infrastructure and productivity.

"The need is to address critical infrastructure issues such as irrigation, storage, and supply distribution to ensure food security and economic stability," said the report.

Leveraging AI can boost economic growth, with opportunities for public-private partnerships to replicate the success of India’s digital infrastructure.

Prime Minister Narendra Modi said this week that India is becoming a major stakeholder in the global supply chain and this growing capacity is the foundation of its economic growth. PM Modi said over 140 crore citizens are working with the resolve of making India the third-largest economy in the world.

(IANS)