India on Track to Become World’s Third-Largest Economy Within Three Years

India is getting ready to leapfrog Germany and Japan to secure the title of the world’s third-largest economy in the next three years, according to NITI Aayog Chief Executive Officer B V R Subrahmanyam. Currently sitting at No. 5 in the world with a gross domestic product (GDP) of USD 4.3 trillion, Subrahmanyam said India would vault to No. 4 by the end of next year and quickly claim its spot at No. 3 soon after.

He assigned this swift advance to the sustained reforms of India, a youthful population, and an enlarging marketplace. These three he took to be the distinguishing features of India, as a place to invest, in contrast to the many countries around the world that are now experiencing falling birthrates and an increasing median age.

Demographics Drive Global Relevance

A central idea in Subrahmanyam's way of looking at things is that India's demographics work to its advantage. While population growth is not something most nations aspire to, India is one of the few countries in the world expected to see any significant increase in the number of people of working age over the next couple of decades. Japan and Germany in the next 10 years will see their populations shrink. By contrast, India will see lakhs of young people come into the workforce every year.

India's workforce isn't just large, but it is also increasingly skillful and mobile. This is, or at least should be, the central pillar of the country's effort to become globally competitive in the coming decades, an undeniable demographic dividend. No economy under demographic strain can be competitive without a reliable human capital supplier, and that's what India is aiming to be for the next several decades.

India’s Shift Toward a Knowledge Economy

Subrahmanyam stressed that India’s growth story is going beyond just the basic development metrics. Today, as a middle-income country, we are focusing on building a knowledge-driven economy. Domestic firms, even in the legal and accounting sectors, should aspire to global ambitions and meet international standards in innovation and service delivery. That’s what India’s next growth story is all about.

He also highlighted that India, with its democratic system and sizable young population, has the potential to become a global education hub, exporting not just talented individuals but also institutions and educational systems.

Path to USD 10 Trillion and Beyond

Reflecting the same optimistic tone, Chief Economic Advisor V Anantha Nageswaran, at the India Conclave 2025, projected India's GDP to cross the $10 trillion threshold by 2047. He emphasized the need for sustained momentum through consistent policies, deregulation, and research and development (R&D) investments.

Regarding the impact of AI, Nageswaran dismissed the idea that low-cost labor would become unimportant. He pointed out that a number of manual services, like plumbing and other trades, are too hands-on and too varied to be completely taken over by machines. He believes the same is true of many not-so-skilled jobs that are too much of a human scale to be performed by robots. For these reasons, Nageswaran sees digital technology as a tool for upgrading the cheap workforce into a more valuable one.