Srinagar, Nov 19: India achieved a historic milestone when its Gross Domestic Product (GDP) crossed the $4 trillion mark in nominal terms for the first time.
India is now 4th largest global economy, behind only the United States ($25.3 trillion), China ($20.9 trillion) and Japan ($4.9 trillion)
On 19 November 2023, India became the world’s fourth-largest economy by surpassing the $4 trillion mark in nominal GDP. This milestone achievement is a testament to India’s strong economic growth and its potential to become a global economic powerhouse.
Contributing factors to India’s economic growth
Several factors have contributed to India’s economic growth in recent years. These include:
Rapid growth of the services sector:
The Indian services sector has been the main driver of economic growth, accounting for over 60% of GDP. This sector has benefited from strong growth in IT, financial services, and telecommunications.
Strong domestic consumption
India has a large and growing middle class, which has been driving up domestic consumption. This has been supported by factors such as rising incomes, increasing urbanization, and expanding access to credit.
Favourable demographics
India has a young and growing population, which is a demographic dividend that can support economic growth. The median age in India is 29, compared to 42 in China and 38 in the United States.
Comparison with top 5 economies
With a nominal GDP of $4 trillion, India is now the fourth-largest economy in the world, behind the United States, China, and Japan. In terms of purchasing power parity (PPP), India is the third-largest economy in the world, behind China and the United States.
Here is a table comparing India’s GDP with the top 5 economies in the world:
| Rank | Country | GDP (nominal) | GDP (PPP) |
|---|---|---|---|
| 1 | United States | $25.3 trillion | $23.3 trillion |
| 2 | China | $20.9 trillion | $30.4 trillion |
| 3 | Japan | $4.9 trillion | $5.4 trillion |
| 4 | India | $4.0 trillion | $13.8 trillion |
| 5 | Germany | $4.3 trillion | $5.4 trillion |
Challenges facing the Indian economy
Despite its strong economic performance, India still faces a number of challenges, including:
High poverty levels
India has a large population living below the poverty line. This is a challenge that will need to be addressed in order to ensure that India’s economic growth is inclusive and sustainable.
Infrastructure bottlenecks
India’s infrastructure is not keeping pace with its economic growth. This is a bottleneck that is constraining investment and growth.
Unemployment
India has a high unemployment rate, particularly among young people. This is a challenge that will need to be addressed in order to ensure that India’s economic growth is creating jobs.
Despite these challenges, India has a bright economic future. The country has a large and growing population, a strong services sector, and a government that is committed to reform. Global economic experts believe that if India can continue to address its challenges, it is well-positioned to become one of the world’s leading economies.
