India to become third-largest economy by 2030-31, says S&P Global

India is set to become the world’s third-largest economy by 2030–31, as per S&P Global India. The country is forecast to grow at an annual rate of 6.7 per cent.

India emerged as the fastest-growing large economy, with gross domestic product (GDP) growth at the rate of 8.2 per cent in the financial year (FY) 2024, surpassing the government's earlier estimate of 7.3 per cent.

Abhishek Tomar, head, S&P Global India Leadership Council, and chief data officer for S&P Global Market Intelligence, said, "India's medium-term prospects are healthy and filled with opportunities in multiple sectors, including trade, agriculture, and AI, likely structural reforms, and growing energy demands. India is poised for growth, and with a young and dynamic workforce, it is well-positioned to shape the global economic landscape."

The research further stated that India must develop infrastructure and geopolitical strategies, particularly regarding its extensive coastline, to maximise trade benefits. Nearly 90 per cent of India's trade is seaborne, necessitating robust port infrastructure to manage increasing exports and bulk commodity imports.

According to the World Bank and S&P Global’s Container Port Performance Index 2023, only three Indian ports found a place among the top 50. Moreover, the performance gap between public and private sector ports was notable, as the country’s largest government-owned port, the Jawaharlal Nehru Port Trust (JNPT), was ranked 96th globally, while the privately operated Mundra Port Terminal in Gujarat ranked 27th.

Until a decade ago, India's government-owned ports commanded about 75 per cent of the country's container volumes, with JNPT and Chennai Port leading the pack. But cargo volumes have increasingly shifted to private ports, given their market-oriented dynamics in a competitive environment, and bureaucratic hurdles associated with pricing and infrastructure investment have limited the attractiveness of government-owned ports, the research said.

Privately run ports in India captured 47 per cent of total cargo in FY24, according to S&P Global's Journal of Commerce. As per the journal, this demonstrates the rise of Adani Ports. Adani-run Mundra Port handled 15.6 per cent more volume than JNPT and grew twice as fast in FY24.

Rahul Kapoor, vice president, global head of shipping analytics and research, stated, “India needs more ports. With big investments pouring into the sector, a balance needs to be struck while we discuss public and private ports.” Additionally, Kapoor stated that the market intelligence firm is expecting freight rates to come down.

The report also added that India’s total petroleum product demand is projected to rise by almost 2 million barrels per day (b/d) to reach 7.1 million b/d by 2035 from 2023 levels, largely led by demand for transportation.