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India is poised to overtake Germany as the fourth largest economy by the end of this year or early next year, Invest India Managing Director and Chief Executive Deepak Bagla said.
From 2015 to date, India has outpaced Brazil, UK, Russia, Italy and France in terms of Gross Domestic Product (GDP). India is the fifth largest economy by GDP.
“Now we beat Germany to the fourth position. Before the pandemic, India was the fastest growing large economy. After the pandemic, India is the fastest growing large economy. The story has begun,” Bagla said at an event.
India’s current GDP is estimated at $3.5 trillion. Bagla said it took the country 67 years to reach the first trillion and eight years to reach the second trillion. It added a third trillion to GDP in the last five years.
Two-thirds of India’s GDP is driven by domestic demand. Demand is ahead of supply and market forces are driving it, he said.
India is undergoing the biggest transformation in history at an experimental scale and pace in all social, economic and political spheres while still being the fastest growing economy before as well as after the pandemic, Bagla said.
Invest India is a team of 450 professionals with an average age of 29 years, who hail from Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs) with backgrounds in banking and finance, Bagla said at the event. It is an investment promotion facilitation agency that helps investors find opportunities in India.
“The team at Invest India is taking up to 93 per cent salary cut to build a new India,” he said.
FDI inflows
India has received a total of $950 billion in Foreign Direct Investment (FDI) since 1947, of which $532 billion has come in the past 90 months from 162 countries, a global record. For the last eight consecutive years, India has set new records in FDI every year.
During 2022, in the middle of the lockdown, India received $ 83.5 billion, the highest FDI. Ninety-three percent of FDI comes through the open route. India remains one of the most open economies in the world.
“The received FDI is in 61 sectors in 31 countries and union territories which is a global record. The new growth in India includes, the lowest in every small city,” he said.
Digital transformation
India, with a population of 1.4 billion, will be the youngest country by 2070, which will drive the engine of growth.
“This is the size of the Indian market. In 2019, there are 960 million plus registered voters, of which 650 million voted. Ninety million are first-time voters,” Bagla said.
In terms of data consumption per capita, India will surpass the US and China by 2022.
By 2022, 41 percent of the world’s real-time digital transactions will happen in India. India has the largest transactions at 48 billion and China is second with 18 billion transactions.
By October 2022, 8.4 billion transactions were made, which shows the scale of digital transformation, Bagla said.
Since 2016, when Startup India was launched, India has ranked third globally in the number of unicorns, second in the number of startups and in the top position in the number of new startups added daily.
“In 2020-21, India will add a unicorn every 29 days. By 2022 India will add a unicorn every 9 days. The startup story is about entrepreneurship,” Bagla said.
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