India is on course to become the world’s third-largest economy within the next few years, senior policymakers and economists said at the World Economic Forum (WEF) in Davos, amid strong growth momentum and ongoing structural reforms.
The optimism follows the International Monetary Fund’s (IMF) decision to raise its growth forecast for India to over 7 percent for the next fiscal year, positioning the country as a major global growth engine at a time of slowing international economic expansion.
Speaking at the forum, India’s Union Minister Ashwini Vaishnaw said India’s rise in global economic rankings was inevitable.“India will become the third-largest economy in the coming few years,” he said, calling it a certainty.
IMF First Deputy Managing Director Gita Gopinath echoed the view, stating that current projections place India reaching the milestone by around 2028.
However, Gopinath said the central challenge lies beyond rankings. “The challenge for India is not becoming the third-largest economy,” she said. “It is about raising per capita incomes.”
Vaishnaw attributed India’s growth trajectory to public investment in physical, digital and social infrastructure, inclusive growth policies, manufacturing expansion and regulatory simplification. He said the government has removed 1,600 outdated laws and more than 35,000 compliances, aiming to modernise legal and administrative systems across sectors.
Gopinath acknowledged reform progress but noted persistent structural issues, including difficulties in land acquisition and the need for judicial and land titling reforms. Sustaining growth, she said, will depend on translating reforms into productivity gains and higher incomes.
Employment emerged as a key theme across discussions. Salil S Parekh, CEO of Infosys, said India’s technology sector directly employs around six million people, with broader economic spillovers benefiting up to 40 million through middle-income wages.
Gopinath warned of a skills mismatch in the labour market, noting that only about 30 percent of India’s growth has come from labour, with the economy remaining relatively capital-intensive. She stressed the need for labour flexibility and sustained investment in human capital.
On technology, Nandan Nilekani highlighted India’s digital public infrastructure as a key driver of inclusion, linking identity systems, banking and digital payments to enable small businesses and informal workers to access finance and scale operations.
Vaishnaw said India’s approach to artificial intelligence focuses on broad deployment rather than building the largest models, aiming to ensure productivity gains across sectors. Gopinath cautioned that AI could disrupt service-sector jobs, including business process outsourcing, potentially affecting employment creation.
Environmental and social challenges were also raised. Gopinath said pollution poses a significant economic cost, citing World Bank estimates that attribute 1.7 million deaths annually in India to pollution, with consequences for productivity and investment.
Healthcare infrastructure was described as a critical component of long-term growth. Suneeta Reddy said increased private-sector investment has begun reversing medical tourism outflows and retaining skilled professionals, though substantial investment gaps remain.
On trade and geopolitics, Vaishnaw said India has increased exports despite global trade tensions, particularly in electronics, and has emerged as a trusted partner in global value chains. Gopinath said the global economy has shifted permanently toward fragmentation, with national security increasingly shaping trade policy.
Business leader Sunil Bharti Mittal said India’s economic leverage lies in its large domestic market, young population and long-term infrastructure development, supported by digital systems as manufacturing capacity expands. 9Source: News syndicate)
