India is poised to overtake Germany and Japan in terms of economic size within the next three years, according to B V R Subrahmanyam, CEO of the government think tank NITI Aayog. Speaking at an event on Thursday, he projected that India will soon rise to become the world’s third-largest economy, a significant leap driven by demographic advantages, economic resilience, and the strength of democratic institutions.

Subrahmanyam stated, “Currently, the Indian economy is the fifth largest in the world. End of next year, we will be the fourth largest. The year after that, we will be the third largest.” According to IMF data, India’s economy is presently valued at USD 4.3 trillion.

He further added that if the current pace is maintained, India could become the second-largest economy by the year 2047, with a projected size of around USD 30 trillion—the year that will also mark 100 years of Indian independence.

A Vision for Global Economic Leadership

This vision is not just about overtaking countries in terms of GDP size, but about establishing India as a knowledge-driven, democratic powerhouse. The CEO of NITI Aayog emphasised that the future of economic development will be shaped by countries that can offer both human capital and institutional strength, and India is well-placed on both fronts.

“It is not about feeding the poor or clothing the naked anymore,” Subrahmanyam remarked. “It is about how you become a knowledge economy.” His comments highlighted the shift in India’s development paradigm from basic sustenance issues to building high-skill, innovation-driven sectors that can generate global competitiveness.

He urged Indian companies, particularly those in legal, financial, and professional services, to aim for global leadership, stating that they must aspire beyond local dominance and establish their presence across the world.

India’s Unique Demographic Advantage

Subrahmanyam also pointed out that India is entering an era where its demographic structure will become its biggest economic asset. As countries such as Japan and Germany grapple with shrinking populations and ageing workforces, India will continue to offer a young, skilled, and mobile workforce that can meet global demands.

According to Subrahmanyam:

• Japan is recruiting over 15,000 Indian nurses

• Germany is taking in nearly 20,000 Indian healthcare workers

These numbers reflect the growing reliance of developed nations on Indian talent as their own family systems break down and domestic workforces dwindle.

He said, “India will be a stable supplier of working-age people across the world. This is going to be our single biggest strength.”

Democracy as a Pillar of Strength

In addition to demographics, democracy is seen as a strategic advantage. Subrahmanyam highlighted that unlike countries governed by authoritarian systems, India’s democratic institutions and freedom-driven innovation model make it more attractive to global investors and education seekers.

He even suggested that India can become the education hub for the world, offering high-quality, low-cost education options across sectors. This, combined with its large English-speaking population and increasing digital access, could turn India into a learning destination for students across Africa, Southeast Asia, and the Middle East.

Future Outlook: From Aspirations to Action

Subrahmanyam's projections are optimistic but not unfounded. India has already shown impressive resilience through global economic disruptions, including the COVID-19 pandemic and subsequent supply chain shifts. With sustained policy support, infrastructure investments, and skilling initiatives, the country is preparing itself to rise up the global value chain.

Sectors such as:

• Digital infrastructure

• Green energy

• Manufacturing under Make in India

• Startups and Innovation

• Healthcare and Education

are expected to play a major role in propelling India’s economic journey forward.

India’s economic policy is increasingly focused on creating a self-reliant but globally integrated economy, and its moves towards bilateral trade agreements, multilateral cooperation, and institutional reforms reflect this commitment.

Challenges and Caution

While the outlook is positive, experts caution that India must:

• Accelerate judicial and regulatory reforms

• Improve ease of doing business

• Ensure financial sector robustness

• Invest in health and education deeply

• Avoid regional disparities in development

Subrahmanyam’s comments should be seen not just as a statement of current momentum but as a call to action for all stakeholders—government, private sector, and civil society.

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