India stands at pivotal juncture as policy choices to shape next two decades: DBS report - World News Network

New Delhi [India], November 7 (ANI): India stands at a defining moment where strategic policy choices will determine the structure and direction of its economy over the next two decades, according to a new report by DBS Group Research titled “India 2025-40 Outlook: Pivotal Juncture.”
The report highlights that “India stands at a pivotal juncture where policy choices will shape the contours of the economy for decades to come,” adding that the nation’s long-term economic promise remains intact but will require “institutional reforms, investment expansion, and robust human capital development.”
DBS projects that “India’s economy will grow by an average 6.7 per cent from 2025 to 2040,” outpacing China’s “3.0 per cent average real GDP expansion in the same period.”
On a nominal basis, GDP growth is expected to average “9.7 per cent on an INR basis.” The bank also sets out a more optimistic outlook, stating that “a bull case could take growth to 7.3-7.5 per cent in the same period.”
With this pace, India’s nominal GDP is “expected to surpass USD 11 trillion by 2040,” solidifying its position as the world’s third-largest economy. Per capita incomes, meanwhile, are projected to “rise from USD 3,700 by the end of this decade to about USD 7,000 by 2040.”
The report emphasises that “building a robust human capital framework is crucial for the economy to be able to reap the most dividends from its favourable demographic trends.”
With nearly 26 per cent of India’s population between 10-24 years old, the working-age cohort is expected to expand by 8-10 million annually through 2040.
However, structural challenges remain. DBS notes that “about 40 per cent of the workforce is in the agricultural sector, which contributes less than a fifth of growth, while separately, over two-thirds of the total labour force is either self-employed or classify as casual labour.”
This imbalance highlights the urgency for skilling, health, and education reforms.
On trade diversification, the report says, while India is catching up on merchandise trade, “India has a strong advantage in service exports.” Its “share in global services exports has more than doubled, reaching around 4.3 per cent in 2023 from 1.9 per cent in 2005.”
Service exports have expanded at “8 per cent CAGR between 2012-2025.” Even under conservative assumptions, DBS forecasts that “service exports could grow to USD 480 billion by 2030 and onwards to USD 650 billion by 2040.”
The study also stressed that “India’s rapid growth in its digital journey, and growth in related infrastructure is also crucial, led by data centres.”
The country’s AI mission and digitisation initiatives, including UPI and IndiaStack, are expected to enhance total factor productivity over the coming decades.
Ovderall, DBS asserts that India’s transformation hinges on a coordinated push across development, diversification, digitalisation, and decarbonisation.
The report concluded that India’s “policy framework over the next decade will determine how effectively it converts demographic potential into sustained, inclusive, and high-quality growth.” (ANI)

Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News