July 16, 2025
The country aims to add USD 1 trillion to its GDP every 12–18 months, targeting a nominal GDP growth rate of 9% until 2047
Rapid urbanisation will drive productivity and job creation, with megacities projected to contribute 70% of India’s GDP by 2036
Maharashtra, Gujarat, and Tamil Nadu are each on track to become USD 1 trillion economies by 2035, accelerating India’s industrial momentum
Capital market participation is rising, with demat account penetration expected to jump from 11% in 2022 to 30% by 2035
India is already firmly on the path to economic greatness, having surpassed Japan in 2025 to become the fourth-largest economy. By 2028, it is expected to overtake Germany and claim third place globally. This momentum is no accident. India is targeting a remarkable nominal GDP growth rate of 9% annually until 2047, with plans to add approximately USD 1 trillion to its economy every 12 to 18 months.
Backed by strong macroeconomic fundamentals, favourable demographics, rapid urbanisation, a deepening capital market, and committed structural reforms, India’s long-term trajectory appears robust. A recent study by the Foresighting team at MarketsandMarkets (MnM) outlines the key megatrends fuelling this transformation.
Macroeconomic resilience amid global headwinds
India’s economic engine has proven resilient, with a projected path towards becoming a USD 30 trillion economy by 2047. The gross savings-to-GDP ratio is forecast to rise to 48% by 2036–37, supporting capital formation and investment-led growth. Despite challenges such as currency depreciation and current account concerns, growth remains stable, driven by strength in manufacturing and services.
Urbanisation and infrastructure
Urbanisation is expected to be the cornerstone of India’s growth story through 2035. The urban population, currently at 36%, is projected to cross 50% in the next decade. Megacities, megaregions, and megacorridors are expected to become the new economic engines, contributing nearly 70% of the country’s GDP by 2036.
To support this transformation, the government plans to invest over USD 290 billion annually in infrastructure until 2030. Flagship initiatives, such as the PM Gati Shakti National Master Plan, are designed to bring 16 ministries onto a unified digital platform, enabling coordinated infrastructure rollout across various sectors, including rail, roads, ports, and aviation.
The middle class
India’s middle class is expected to be a significant economic lever, with an anticipated expansion of more than 597 million people between 2015 and 2040. This demographic shift is anticipated to drive more than 75% of the nation’s expenditure growth, lifting millions out of poverty. The share of destitute households is projected to fall from 15% today to just 6% by 2031.
State-level transformation
Three key states , Maharashtra, Gujarat, and Tamil Nadu , are forecast to reach individual GDPs of USD 1 trillion by 2035. Collectively, their output would match that of the UAE, Sweden, and Belgium combined. These states have emerged as industrial and financial powerhouses through targeted investments in manufacturing and infrastructure, reinforcing India’s decentralised growth model.
Capital markets are gaining ground
India’s capital markets are expanding rapidly, bolstered by growing retail participation, favourable policies, and strong domestic investment. Despite only 6% of household wealth currently invested in equities, the number of demat accounts is set to rise from 11% of the population in 2022 to about 30% by 2035.
Export push and manufacturing revival
India’s manufacturing sector, underpinned by initiatives such as ‘Make in India’ and the Production-Linked Incentive (PLI) scheme, has attracted over €16 billion in investments and €1.1 billion in incentives across 14 key sectors. While earlier FTAs had a limited impact, upcoming agreements with the UK, US, and EU are expected to unlock new trade routes and position India as a competitive manufacturing alternative under the China+1 strategy. By 2030, India aims to achieve USD 2 trillion in exports, with a growing focus on new markets in Africa, Latin America, and Central Asia.
Future-ready sectors to lead India’s rise
India’s industrial landscape is being reshaped by a host of high-growth sectors poised to play a dominant role in the country’s future economic trajectory.
Automotive
India is set to become a global hub for automotive manufacturing, projected to produce and sell over 7.5 million vehicles by 2030. It is already the world’s largest two-wheeler market and is investing heavily in clean mobility, domestic demand, and affordable production.
Chemicals
With strong capabilities in speciality chemicals and value-added production, India ranks high globally in polymer consumption, agrochemical output, and dye manufacturing. The sector is buoyed by rising demand from the textiles, agriculture, and manufacturing sectors.
Oil and Gas
Although global oil demand is expected to peak by 2032, India’s requirement is projected to continue growing, with consumption anticipated to reach 9–12 million barrels per day by 2045. As the fourth-largest refining hub, India plays a pivotal role in the petroleum, petrochemical, and renewable fuel sectors.
Healthcare
India’s healthcare sector is on track to reach USD 800 billion by 2030, driven by infrastructure growth in Tier 2 and 3 cities, rising awareness, and increasing incomes. The sector is crucial in meeting the health needs of the country’s vast and diverse population.
Space
India aims to capture 8–10% of the global space market by 2030 and 15% by 2047. From satellite launches and applications to space tourism and asteroid mining, the sector is expanding across the entire value chain.
Technology
The tech industry is expected to contribute nearly 20% of GDP by 2030, encompassing software services, fintech, AI, digital platforms, and e-commerce. The data centre market alone is projected to exceed USD 15 billion, growing at a 15% annual rate through 2030.
Semiconductors
Although India currently imports most of its semiconductors, it employs approximately 20% of the global chip designers. Under the India Semiconductor Mission, the government has sanctioned five plants with a combined investment of USD 18.15 billion, aiming for a USD 150 billion industry by 2030.
Food and Beverages
With a population of 1.4 billion, India’s food and beverage (F&B) sector is poised to become a USD 1 trillion industry by 2030. The growth spans the entire spectrum—from traditional food processing and modern retail to food-tech and health-oriented products.
India’s future is built not on siloed sectors, but on interconnected industries that reinforce one another. Automotive depends on semiconductors and chemicals; healthcare thrives on tech innovations; and the space economy draws from materials, electronics, and ICT. This integrated industrial ecosystem creates a powerful engine for sustained, high-value growth, capable of absorbing global shocks and spurring job creation.
India stands on the edge of an extraordinary transformation. With the potential to contribute over USD 500 billion in manufacturing value and create millions of jobs, it is not just growing, it is reinventing its economic identity. As the aspirations of 1.4 billion people come into sharper focus, India’s economic awakening may well redefine the global order for decades to come.
Source: Fortune