India’s GDP Soars to $3.75 Trillion, Cementing its Position as a Global Economic Powerhouse

India’s Gross Domestic Product (GDP) has experienced an impressive surge, reaching $3.75 trillion in 2023 compared to approximately $2 trillion in 2014, according to Union finance minister Nirmala Sitharaman’s announcement on Monday. The finance minister lauded India as a ‘bright spot’ in the global economy, emphasizing its ascent as the fifth-largest economy worldwide. Surpassing UK last year, India now trails only the US, China, Japan, and Germany, as projected by the International Monetary Fund (IMF). A decade ago, India ranked 11th among major economies.

The country’s growth momentum persisted, with a stronger-than-expected fourth quarter propelling India’s growth rate to 7.2% in FY23, surpassing the 7% projection outlined in the second advance estimates released in February. This remarkable achievement underscores India’s economic resilience in the face of numerous challenges.

Recently released provisional estimates by the National Statistical Office (NSO) confirm that the real GDP growth for 2022-23 stands at 7.2%, surpassing the earlier projection of 7%.

Government data revealed that the GDP rose by 6.1% in the March quarter compared to the previous year, displaying sequential acceleration from the upwardly revised 4.5% in the preceding quarter. In a survey conducted by ET, 20 economists had earlier estimated a median growth of 5.1% in the fourth quarter.

Chief Economic Advisor Dr V Anantha Nageswaran commended the estimated 7.2% real GDP growth in 2022-23, expressing confidence that the final numbers for the fiscal year will yield even higher growth when they are finalized in early 2026.

Speaking at an event organized by the Bharat Chamber of Commerce, Nageswaran acknowledged the collective efforts of the government and the people, attributing the 7.2% GDP growth in FY23 to their contributions. He stated, “It is efforts of people like you more than the government that gave us 7.2% real GDP growth in FY23 following the 9.1% in FY22,” as quoted by ANI.

Nageswaran added that the current GDP growth estimate is the first reliable estimate, and as more data becomes available, further revisions are expected to be on the upside.

However, Moody’s has projected a growth rate of 6-6.3% for the Indian economy in the June quarter, while cautioning about the risks of fiscal slippage due to weaker-than-expected government revenues in the current fiscal year. This growth estimate is lower than the 8% projection made by the Reserve Bank of India (RBI) in the first quarter.

In an interview with PTI, Moody’s Investors Service Associate Managing Director Gene Fang stated that India’s general government debt is relatively high at around 81.8% of GDP for 2022-23, while debt affordability is low. He further added that India’s growth is anticipated to remain relatively flat at around 6-6.3% in the first quarter of the current fiscal year.

As India continues its impressive economic journey, the country’s GDP expansion reinforces its position as a global economic powerhouse.