India to Become World’s 3rd Largest Economy by 2028: Morgan Stanley

In March 2025, New York (the United States of America, USA)-based brokerage firm, Morgan Stanley has projected that India will become the 3rd largest economy in the world by 2028, supported by macro-stability influenced policy and better infrastructure. India will overtake Germany (which is currently world’s 3rd largest economy) as its economy is most likely to expand to USD 5.7 trillion in 2028.

• It has further projected that the Indian economy will expand from USD 3.5 trillion (in 2023) to USD 4.7 trillion (in 2026), which will make it the world’s 4th largest economy behind the United States of America (USA), China and Germany.

Key Projections:

i.Morgan Stanley highlighted that over the period of time Indian economy has improved its global position i.e. India was world’s 12th largest economy in 1990, dropped to 13th spot in 2000 and then increasing to 9th (in 2020) and 5th (in 2023).

ii.As per Morgan Stanley, India’s share of the world’s Gross Domestic Product (GDP) is expected to increase from 3.5% to 4.5% in 2029.

iii.It has further projected 3 different situations for India’s growth: Bear, Base and Bull.

• Bear Scenario: In this case, the Indian economy is expected to increase from USD 3.65 trillion (in 2025) to USD 6.6 trillion (in 2035), with its per capita GDP increasing from USD 2,514 to USD 4,247 for the same period of time.
• Base Scenario: In this case, the Indian economy is expected to increase to USD 8.8 trillion, and its per capita GDP will be USD 5,683.
• Bull Scenario: In this case, the Indian economy is expected to USD 10.3 trillion, and its per capita GDP will be USD 6,706.

iv.It has estimated that India’s GDP will be 6.3% for Financial Year 2024-25 (FY25) and 6.5% (FY26).

v.Headline Consumer Price Index (CPI) has eased from its near-term peak close to 4%, attributed by moderating food prices while core inflation continues to be stable.

• The headline inflation depends on food prices (account 46% of the CPI basket), is projected to soften in upcoming months.
• It has estimated that inflation will be 4.3% Year-on-Year (Y-o-Y) in FY27 compared to 4.9% in FY25.

vi.It has projected that India’s Current Account Deficit (CAD) will remain 1% of GDP in FY27, reflecting continued resilience in the external balance sheet.

About Morgan Stanley:
Chairman and Chief Executive Officer (CEO)- Ted Pick
Headquarters- New York, the United States of America (USA)
Established- 1935