India to Become World’s 3rd Largest Economy by 2028, Hit $10.6 Trillion by 2035: Morgan Stanley

Delhi/Hyderabad, July 23 (Maxim News): India is poised to become the third-largest economy in the world by 2028 and is expected to more than double its economic size to $10.6 trillion by 2035, according to a latest report by global investment firm Morgan Stanley.

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The report highlights the critical role of India’s states and union territories in shaping this growth, with five states — Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka — projected to each reach an economic size of nearly $1 trillion between 2030 and 2035, putting them among the top 20 global economies.

States Will Power India’s Global Economic Rise

Based on current data, Maharashtra, Gujarat, and Telangana are the top contributors to India’s GDP. Notably, Chhattisgarh, Uttar Pradesh, and Madhya Pradesh have shown remarkable improvement in their rankings over the past five years.

“India will account for nearly 20% of global growth in the next decade, becoming a key driver of earnings for multinational corporations,” the report stated.

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Morgan Stanley emphasized that India’s competitive federalism — where states compete to attract investment through business-friendly policies and infrastructure development — will play a decisive role in determining whether the country achieves this ambitious growth trajectory.

“The success of India’s states in fiscal governance, regulatory reforms, and investment promotion will decide whether the country becomes the world’s factory and whether per capita income doubles in the next seven years,” the report said.

Infrastructure Push Accelerating Growth

The report also credits India’s accelerated infrastructure expansion over the past decade as a key driver of future growth. The Central Government’s capital expenditure (capex) has doubled from 1.6% of GDP in FY2015 to 3.2% in FY2025.

Key achievements include:

• 60% increase in highway construction
• Doubling of airports
• Quadrupling of metro rail networks

National initiatives like PM Gati Shakti, Bharatmala, Sagar Mala, UDAN, and the National Infrastructure Pipeline (NIP) have been effectively implemented alongside state-level projects, creating robust physical and digital connectivity across India.

India’s States as Engines of Economic Transformation

States are not only legislative powerhouses but also key economic players in areas like urban development, water resources, and electricity infrastructure. Their coordination with central schemes and strategic investment planning is vital to maintaining growth momentum.

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“As India transitions into a $10.6 trillion economy, the states will be central to shaping its global position in manufacturing and innovation,” the report concluded.

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