Latest news with #ArvindVirmani
Indian Express
4 days ago
- Business
- Indian Express
India may soon become the third-largest economy in the world. But there is more to it
In a bout of professional enthusiasm, the chief executive officer of NITI Aayog, the Union government's policy body for transforming India, announced that the Indian economy had overtaken Japan to become the world's fourth-largest economy, following the USA, China and Germany. He jumped the gun because, as NITI Aayog member Arvind Virmani pointed out, this is likely to happen a few months down the road. With a nominal GDP of $4.187 trillion, India is set to move ahead of Japan's GDP of $4.186 trillion by the end of 2025. However, as many have pointed out, the vast gap between Japan's per capita GDP of $33,900 and India's per capita GDP of $2,880 sets the two apart. India remains a low-middle-income economy, a developing economy with a modest per capita income but demographics that will sustain the growth process. Japan is a developed, if an ageing, industrial and trading power. The sustained growth of the Indian economy over the past three decades, with its ups and downs, has, without doubt, slowly but surely increased the size of the economy. Way back in July 1991, the then finance minister of India, Manmohan Singh, told Parliament, prefacing his forecast with Victor Hugo's famous words that 'no power on Earth can stop an idea whose time has come', that the emergence of India as a major economic power in the world happens to be one such idea. It became an idea that gained international recognition a few years later when the British historian Angus Maddison published his masterly survey of the world economy pointing to the resurgence of China and India. Maddison's classic study of The World Economy (OECD, 20023) made the point that in 1700, China and India accounted for almost half the world income and that two centuries of colonialism, combined with the fact that the Industrial Revolution had occurred mainly in Europe, contributed to the decline of these ancient and large Asian economies. The Maddison study kindled hope in Asia that China and India were on the way to recover their lost space in the global economy and that the 21st century would once again be an Asian century. Since China was by then rising at a faster pace, it overtook Japan in 2010. This event happened soon after the transatlantic financial crisis (usually referred to as the global financial crisis), of 2008-09. The crisis had helped China overtake Japan and Europe and reduce the gap with the USA. It created a global flutter and marked the turning point in China's global rise. It is instructive to recall that in 2010, China overtook Japan when Japan's GDP was still $5.474 trillion. China's emergence as the world's second-largest economy sent Japan into a funk. Japan had already lived through a decade of low growth and low expectations, and China overtaking it became a wake-up call. It would not be incorrect to speculate that the return of Shinzo Abe as prime minister of Japan in 2012 (his first term of 2006-07 was truncated by poor health) was partly on account of Japan's yearning for a strong and charismatic leader focused on economic revival. Abe began his second tenure launching the 'three arrows' programme that came to be known as 'Abenomics' — of aggressive monetary easing, liberal fiscal policy and structural reforms aimed at enhancing productivity and growth. This gave Japan hope that, despite being pushed to third place by China, it could still remain a globally important economy. The exit of Abe, followed by a string of lacklustre leadership and the challenges posed by the return of President Donald Trump, have depressed Japan once again. To add to its woes, Germany recently overtook Japan, becoming the third-largest economy, pushing Japan to fourth place. Germany, too, has been slowing down, and so Japan and Germany could see themselves swapping places from time to time, depending on their relative performance. Also, recall that China overtook a still-growing Japan, India is overtaking a slowing Japan and a slowing Germany. It is against this background that news has come from the International Monetary Fund that India is now poised to overtake Japan. It is interesting to note that while there was much hand-wringing and widespread concern in Japan when China overtook it, the news about India has not made any impact in Japan. There was, according to my friends in Japan, little news coverage and no expression of any concern. This could be on account of the fact that while China is viewed as a challenge in Japan, India is viewed as an opportunity. Good diplomatic and economic relations have, in part, contributed to a benign response in Japan to the news of India's rise. Equally, the fact that India in no way poses any challenge to Japan, either as an economic competitor or as a geopolitical rival, would also explain the subdued reporting of the IMF news. When China overtook Japan, the former was viewed as a significant competitor in the global market as well as a geopolitical rival. Export-dependent Japan viewed with concern the rise of China as a global trading power. India, on the other hand, is still not viewed as a competitor in the trading world, much less a geopolitical rival. It is still possible that exchange rate changes, new challenges in global trade and seasonal performance of the three economies — India, Japan and Germany — may keep the rank race alive for some time. After all, the gap between the three is not much. If the Indian economy forges ahead over the next few years and crosses the $5 trillion mark, it would place some distance between itself and Japan and Germany. If not, these rankings could keep changing. What is, however, certain is that once India clearly establishes itself as the third-largest economy, it will remain in that place for a long time to come, given the distance it has to travel to catch up with China, whose nominal GDP is currently around $18 trillion. With the US and China in a race for economic space and geopolitical influence, India's best bet would be to focus on its own economic performance and ensure that it is able to sustain an inclusive growth process that makes the economy more competitive and improves peoples' lives. The writer is founder-trustee, Centre for Air Power Studies and distinguished fellow, United Service Institution of India
India.com
5 days ago
- Business
- India.com
India just one step away from matching China's economy by..., NITI Aayog advisor reveals game-changing strategy; 'If India maintains...'
India just one step away from matching China's economy by..., NITI Aayog advisor reveals game-changing strategy; 'If India maintains...' India's economy is growing faster than ever, and big changes are on the way. According to Dr. Arvind Virmani, a top advisor at NITI Aayog, India is all set to climb the global economic ladder. In a recent TV interview, he said that India could become the world's third-largest economy by 2027 or 2028, overtaking Germany, which currently holds that spot. He also mentioned that by the end of 2025, India is on track to surpass Japan and become the fourth-largest economy. This prediction matches what the IMF said in its April report. The IMF noted that India's GDP is expected to reach USD 4.19 trillion by 2025, bringing it very close to moving ahead of Japan in global rankings. 'We are the fourth-largest economy as I speak. We are a USD 4 trillion economy, and this is not my data—it's IMF data,' Niti Aayog's chief executive officer BVR Subrahmanyam said during a press briefing on May 24, 2025. 'It is only US, China, Germany, which are larger than India and if we stick to what is being planned and what is being thought through, in 2.5-3 years, we will be the third largest economy,' he added. India could be on the same level as China by 2050 Dr. Arvind Virmani has said that if India's economy keeps growing at a steady rate of 6 to 6.5 per cent every year for the next 25 years, then by 2050, India could be on the same level as China. He also highlighted the importance of the upcoming trade agreement between India and the US, saying it could play a key role in boosting India's economic growth. Talking about the next few years, he said that clearing up the confusion around tariffs is very important. These uncertainties are currently hurting international trade. In a conversation with news agency PTI, Dr. Virmani added that India is already on its way to becoming the world's fourth-largest economy. He personally believes this could happen by the end of 2025.
NDTV
27-05-2025
- Business
- NDTV
"If India Maintains 6 Per Cent Growth...": NITI Aayog Member Predicts Outcome
New Delhi: India is all set to become the third largest economy in the world by 2027-28, Dr Arvind Virmani, member of government think tank NITI Aayog has told NDTV in an exclusive interview. "My assessment is that India will become the third-largest economy in the world by the end of 2027 or by 2028," he said. India's economy will even surpass Germany - currently the third largest -- in size. If the Indian economy continues to grow at a rate of 6 per cent to 6.5 per cent annually for the next 25 years, then by 2050, India could reach the level of China's economy, he said. On a related note, he said the proposed Bilateral Trade Agreement between India and the United States is extremely crucial for India's economic expansion. India, he said, is expected to reach the spot of the fourth largest economy by the end of this financial year - the spot now occupied by Japan. Underscoring the roadmap for the next few years, Dr Virmani also said ending the uncertainty over tariffs is essential, as it is negatively impacting international trade and commerce. Over the next few years special attention is also needed to "diversify sources of manufacturing" -- which could even be the most important step. NITI Aayog had announced last week that the country has reached the fourth largest economy slot. Citing IMF data, NITI Aayog CEO BVR Subrahmanyam said on Saturday, "We are the fourth largest economy as I speak. We are a USD 4 trillion economy as I speak". "It is only the US, China and Germany which are larger than India, and if we stick to what is being planned and what is being thought through, in 2.5-3 years, we will be the third largest economy," Mr Subrahmanyam had said. Dr Virmany, however, said today that the data confirming this would come next year.
Time of India
27-05-2025
- Business
- Time of India
India's economy may overtake Japan soon, but with caveats
India is set to become the world's fourth-largest economy by the end of 2025 (FY 2025-26), according to the International Monetary Fund's (IMF) World Economic Outlook (WEO) report released in April. A few years ago, India overtook the United Kingdom to become the fifth largest, and is now well on its way to rise to the fourth spot in the list of the top 10 largest economies in the world by overtaking Japan. In just 11 years, India has surged from the world's 10th to the 4th largest economy — a remarkable trajectory driven by sustained growth and strategic reforms under the NDA government. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 이미지로 기억하면 영어가 쉬워진다! 40분 특강 무료 공개 스티븐영어 지금 시작하기 Undo ALSO READ: India to become 4th largest economy by end of 2025: NITI Member Arvind Virmani India's growth numbers have triggered premature celebrations, as there is more to it than meets the eye. Live Events India is set to become the world's fourth-largest economy this year, but with the world's largest population, its per capita GDP remains strikingly low at just $2,880, according to the IMF — far behind China's $13,690 and Japan's $33,960. Gross Domestic Product (GDP) per capita is a key economic indicator that measures the average economic output (or income) per person in a country. Economists use GDP per capita to determine the prosperity of countries based on their economic growth. India doesn't even rank in the top 100 countries when it comes to GDP per capita, not even in the Purchasing Power Parity or PPP rankings. A large population (1.4 billion) dilutes the gains of the GDP doubling. Also, informal employment ( approximately 90% of workforce) and low female workforce participation (26% vs. global 47%) limit per capita gains, says Sachchidanand Shukla. Still, the per capita income has close to doubled over the last 10 years. 'That is keeping pace with the overall GDP growth as the population growth is slowing down with fertility rates going close to the replacement rate of 2.2. However, there are regional disparities owing to differential population growth rates as well as the pace of economic development,' says Ranen Banerjee. The brighter picture in 5 points: In 2025, India will become the 4th largest economy in the world, in nominal GDP terms, overtaking Japan, and will be behind only the US, China, and Germany. India's nominal GDP has more than doubled from 2014 to 2025 (projected). It's a growth of 105% in just a decade. In 2025, India will also become a $4 trillion economy. India was the 10th largest world economy in 2014 - come 2025 it will be the 4th largest - a six places jump in rankings in just 11 years. In a world of increasing global economic uncertainties, and amidst geopolitical conflicts and Donald Trump's tariffs, India will still retain the tag of being the fastest growing major world economy with a GDP growth rate of 6.2% for 2025. India achieved an average annual growth rate of 6.7% from 1990–2023 & in fact outpaced the US (3.8%), Germany (3.9%), and Japan (2.8%). What lies ahead? India will realise its dream of becoming a $5 trillion economy in 2027 and the world's third largest in 2028 by overtaking Germany. But to be on the path of stable and sustained economic growth, experts stress on the need for continuous reforms. PwC's Ranen Banerjee advocates for reforms that enable private enterprise to do business without the fear by decriminalising regulatory compliances with application of technology to support in compliances. 'Enabling exports through common facilities for quality outputs by MSMEs and continued investment in infrastructure to bring down logistics cost and enhance evacuation capabilities will be needed,' he adds. L&T's Shukla says, 'Going forward India will need to undertake deep agricultural reforms, labour reforms, education & skilling at a scale along with judicial administrative & police reforms,' he says. Radhika Rao of DBS Bank sees the need to focus on employment generation. 'Wheels of the structural engine will require to be oiled by keeping the development and reform agenda on track. Quality of growth is also likely to improve as macro balances remain in check alongside a changing trade composition. Lifting employment generation and by extension boosting incomes will be the vital objective for the administration in the rest of its term,' she says. There's no question that India ranks as one of the most crucial markets worldwide, including for major powers like the US and China. Over the past 11 years, political stability at the central government and ongoing reforms have strengthened global investor confidence. However, for the benefits of this growth to reach the broader population, it's essential to focus on creating ample employment opportunities for young people and building a robust manufacturing sector to ensure sustained, stable, and dependable economic progress. (With TOI inputs)
India Gazette
26-05-2025
- Business
- India Gazette
India to become fourth-largest economy by 2025-26: NITI Aayog's Arvind Virmani
New Delhi [India], May 26 (ANI): NITI Aayog member Arvind Virmani on Monday expressed confidence that India will be the fourth-largest economy in the world by 2025-26, surpassing Japan, as forecasted by the International Monetary Fund (IMF). 'Data will come in April (2026). Sometimes it comes a little earlier in February or March. But, we can only expect the international confirmation (in 2026),' Virmani told ANI. 'I am fairly confident that in 2025-26, our forecast will come right -- my forecast and the IMF forecast (that India will become the fourth largest economy),' he added. According to the IMF's April edition of the World Economic Outlook, India's nominal GDP for fiscal year 2026 is expected to reach around USD 4.187 trillion. This is marginally more than Japan's likely GDP, which is estimated at USD 4.186 billion. In September 2022, India had surpassed the UK to become the fifth-largest economy in the world. India continues to be among the fastest-growing major economies and is expected to maintain this momentum over the coming years, according to multiple global agencies. Even as India is projected to overtake Japan in terms of the size of the economy, the per capita income in India still remains very low. Overall, India has made quite a turnaround, climbing the ladder of economic growth. This can be gauged from the fact that from 11th in 2013-14, India has now positioned itself to become the fourth largest economy soon. To realise the vision of 'Viksit Bharat' or a developed nation dream by 2047, India will need to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two, the Economic Survey document for 2024-25 tabled on January 31 asserted. (ANI)
