India expects to become the world’s second largest economy in PPP by 2038: Report
India could become the world’s second largest economy in PPP in 2038, a new report on Wednesday showed.
PPP is actually the ratio of the market basket price of one location divided by the price of the goods at different locations.
According to the EY report, according to the International Monetary Fund, India’s economy could reach US$20.7 trillion by 2030 (PPP clause), better than the United States, China, Germany and Japan.
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Among the largest economies, India has a median age of 28.8 in 2025, with the second highest savings rate. The government debt-to-GDP ratio is expected to fall from 81.3% in 2024 to 75.8% in 2030.
The report said that while China’s total size is expected to be a $42.2 trillion economy by 2030, aging population and rising debt are challenges.
According to the EY report, Germany and Japan are subject to high school age restrictions and rely heavily on global trade.
India, on the other hand, has young demographic information, increased domestic demand and sustainable fiscal prospects.
DK Srivastava, chief policy adviser for EY India, said India’s comparative advantage, its young and skilled workforce, robust savings and investment rates and relatively sustainable debt situation will also help maintain high growth, even in a turbulent global environment.
He noted: “By building resilience and increasing the capabilities of key technologies, India is well positioned to be closer to its Viksit Bharat’s aspirations by 2047.”
By 2028, India is also expected to be the third largest economy in the market exchange rate maturity, surpassing Germany.
The country’s trajectory is strengthened not only through demographics, but also through structural reforms and a resilient foundation.
