India is poised to ascend to the position of the world's third-largest economy by 2027-28, according to Dr. Arvind Virmani, a member of the government think tank NITI Aayog. This projection is based on India's consistent economic growth and strategic policy implementations. Surpassing Germany in size, this achievement would mark a significant milestone in India's economic trajectory.
Dr. Virmani, in an interview with NDTV, stated, "My assessment is that India will become the third-largest economy in the world by the end of 2027 or by 2028." He emphasized that if the Indian economy maintains a growth rate of 6% to 6.5% annually over the next 25 years, it could potentially reach the economic level of China by 2050. This long-term vision underscores the transformative potential of sustained growth.
Several factors contribute to this optimistic outlook. India's economic growth has been robust over the past two decades, navigating global financial crises and the COVID-19 pandemic. The country's nominal GDP for 2025 (FY26) is expected to be USD 4.187 trillion, marginally exceeding Japan's estimated GDP of USD 4.186 trillion, according to the International Monetary Fund (IMF). This would position India as the fourth-largest economy, a claim that has been a subject of debate.
Earlier, NITI Aayog CEO BVR Subrahmanyam claimed India had already become the fourth-largest economy, surpassing Japan. However, this assertion was met with skepticism. Dr. Virmani clarified that India is in the process of becoming the fourth-largest economy and expressed confidence that this would occur by the end of 2025, contingent on the availability of complete GDP data for the year.
Finance Minister Nirmala Sitharaman has also stressed the importance of initiatives by the Customs Department, such as Faceless Assessment and Single Window Clearance, in facilitating trade growth and achieving a GDP of USD 5 trillion by 2027-28. She emphasized the need for collaboration among all partners to ensure India becomes the third-largest economy by that time.
To realize this ambitious goal, several key areas require attention. Diversifying sources of manufacturing is crucial, as is resolving uncertainties surrounding tariffs, which negatively impact international trade and commerce. A proposed Bilateral Trade Agreement between India and the United States is also seen as vital for India's economic expansion.
While the overall outlook remains positive, some agencies have offered more cautious projections. S&P Global Ratings, in late 2024, lowered India's GDP growth forecasts for the fiscal years 2025-26 and 2026-27, citing global growth trends. Similarly, in May 2025, S&P Global further lowered India's growth forecast for FY26 and FY27, aligning with projections from the IMF, World Bank, and Reserve Bank of India (RBI). These projections estimate India's growth at 6.3% in the current fiscal year, rising to 6.5% in the next. Despite these adjustments, S&P Global projects a 7% growth rate for FY28 and 6.8% for FY29.
Arvind Panagariya, Chairman of the 16th Finance Commission, has also weighed in, suggesting India could become the third-largest economy by 2026-27 if it maintains its current growth pace, though 2027-28 is more likely. He highlighted the significant decline in extreme poverty, particularly in rural areas, and stressed the importance of transitioning workers from agriculture to industry and services to boost urbanization.
Achieving the goal of becoming the world's third-largest economy requires sustained growth, strategic policy implementation, and addressing key challenges such as tariff uncertainties and the need for diversification in manufacturing. While different agencies offer varying growth forecasts, the consensus remains that India is on a strong trajectory to achieve this milestone by the late 2020s.
