How Could India Become the Second-Largest Economy by 2038?

According to EY projections, India is poised to surpass many global peers and emerge as the second-largest economy by 2038, reaching a staggering $34.2 trillion in GDP (PPP).

By 2030, India’s economy could hit $20.7 trillion (PPP), supported not only by favorable demographics but also by structural reforms, robust policy frameworks, and resilient economic fundamentals.

Among major economies, India stands out with a median age of 28.8 years in 2025 and one of the highest national savings rates, setting the stage for long-term sustainable growth.

The government debt-to-GDP ratio is projected to decline from 81.3% in 2024 to 75.8% by 2030, in contrast to other major economies where debt levels continue to rise.

India is also expected to become the third-largest economy in market exchange rate terms by 2028, overtaking Germany along the way.

While US tariffs may impact roughly 0.9% of India’s GDP, the effect on overall GDP growth can be limited to just 0.1 percentage point if countermeasures like export diversification, stronger domestic consumption, and enhanced trade partnerships are implemented.

With the right policies and continued reforms, India is on track to strengthen its global economic standing while safeguarding growth against external headwinds.