India to become third-largest economy by FY31: S&P report

India is on course to becoming the world's third-largest economy by 2030-31, with an expected annual growth rate of 6.7 per cent this fiscal year, according to an S&P Global report released on Thursday.

The report highlighted that reforms are key to sustaining this momentum, with an anticipated 8.2 per cent growth in FY2024. These reforms aim to enhance business transactions, improve logistics, attract private sector investment, and reduce dependency on public capital.

The report also noted that India's equity markets are set to remain vibrant and competitive, driven by strong growth prospects and better regulatory frameworks. Foreign investment in Indian government bonds has surged since the country was included in major emerging market indexes, and further growth is expected.

To maximize trade opportunities, India must focus on infrastructure development and adopt geopolitical strategies, particularly along its vast coastline. Since nearly 90 per cent of India’s trade is seaborne, robust port infrastructure is essential to manage the rise in exports and bulk imports, the report stated.

It also addressed India’s increasing energy demands, suggesting a shift towards sustainable technologies, such as renewables and low-emission fuels, to balance energy security with its transition plans. In agriculture, the report emphasized the importance of advanced technologies and new policies to enhance infrastructure and productivity.

The report called for addressing critical infrastructure challenges like irrigation, storage, and supply distribution to ensure food security and economic stability. This study, part of the inaugural S&P Global India Research Chapter, was launched on Thursday.

(With inputs from PTI)