The Indian economy will grow 6.7 percent annually between now and 2030-31 or become the third largest economy in the world, S&P Global said on September 19.

“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 well-positioned to shape the global economic landscape,” said Abhishek Tomar, Head- S&P Global India Leadership Council.

S&P Global forecasts the Indian economy to grow 6.8 percent in the current fiscal.

The economy grew 6.7 percent in the first quarter, buoyed by steady manufacturing and rise in the services economy.

In the first edition of its report titled “ India Forward: Emerging Perspectives”, the global research firm noted that continued reforms were necessary to boost private investment and reduce reliance on public capital.

India’s capex surge has largely been driven by public capex, which is expected to grow in double digits in FY25 as well.

The report noted that the country needed to develop infrastructure and geopolitical strategies to maximise trade benefits and urged it to look for sustainable energy alternatives to cater to its growing population.

“Addressing the twin challenges of air pollution and climate change will help deliver a high-quality, high-growth economy to the world’s largest democracy,” the report noted.

It also pointed out the need to leverage AI to boost growth prospects further.

"The equity markets are expected to stay dynamic and competitive due to strong growth prospects and better regulation. Foreign inflows into Indian government bonds have surged since the country joined major emerging market indexes, with further growth anticipated," S&P Global stated.

The report noted further noted there's a need to contain risks rising from food inflation, which may keep consumption muted.

“Equally important is the limiting of food inflation by addressing structural bottlenecks and climate risks, as well as fostering conditions for supportive monetary policy,” it said.

India’s food inflation rose again in August, leading to overall inflation rising to 3.65 percent compared with 3.6 percent in the previous month.