Jefferies predicts India to surpass Japan and Germany, becoming world's third-largest economy by 2027

Despite currently ranking as the world's 5th largest market by market capitalization, approximately US $4.5 trillion, India's representation in global indices remains modest, holding the 10th position with a mere 1.6 per cent weight.

Jefferies, a global brokerage firm, envisions India's trajectory toward becoming the world's third-largest economy by 2027. Anchored by robust GDP growth, favorable geopolitical factors, and ongoing reform initiatives, the country has witnessed significant economic expansion over the past decade, propelling it from the 8th-largest to the 5th-largest global economy.

According to Jefferies' analysis, India's GDP has experienced a noteworthy compound annual growth rate (CAGR) of 7 per cent in USD terms, reaching $3.6 trillion. This impressive growth sets the stage for India's further ascent, with Jefferies projecting the country's GDP to surpass $5 trillion in the next four years.

Such growth would position India ahead of economic powerhouses like Japan and Germany, claiming the coveted third spot globally.

While Japan grapples with an officially declared recessionary period and Germany faces a substantial economic slowdown, India stands out as a beacon of strength. The Indian economy's robust performance is attributed to strong demand, increased investments, and a myriad of contributing factors.

Jefferies underscores India's unique position, fueled by a demographic dividend with a consistent labor supply, institutional strength, and advancements in governance.

Jefferies emphasizes that India's economic trajectory is becoming increasingly irresistible for large global investors. Despite currently ranking as the world's 5th largest market by market capitalization, approximately US $4.5 trillion, India's representation in global indices remains modest, holding the 10th position with a mere 1.6 per cent weight.

Analysts at Jefferies foresee a shift in this scenario, anticipating an expansion in India's market free float and the rectification of weight anomalies. They predict that, aligning with market trends and the addition of new listings, India's market capitalization could nearly double to approximately $10 trillion.