- India aims to become a $20 trillion economy by 2036 with sustained reforms needed
- Reforms could raise India's rupee growth rate to 14.2% and currency appreciation by 3-3.6%
- China's rapid growth post-reforms offers a precedent but India's context differs significantly
Can India become a $20 trillion economy by 2036?
The number sounds enormous. But a new report by domestic brokerage Equirus says the target is not out of reach.
There is, however, a catch.
India would need a sustained reform push across several parts of the economy. It would also need much faster growth in the rupee value of its economy and a stronger currency.
According to Equirus, the reforms could raise India's underlying rupee growth rate from around 10.5 per cent currently to about 14.2 per cent. To reach $20 trillion in dollar terms, the rupee would also need to appreciate by roughly 3-3.6 per cent every year.
China Shows Why Target Is Achievable
The scale of India's ambition becomes clearer when China is brought into the picture. China managed a period of exceptionally rapid nominal dollar growth after opening up and pushing through major economic reforms. Equirus argues that this provides a useful precedent for India.
The point is not that India can simply copy China. India's economy, demographics and policy environment are very different.
But China's experience shows that an emerging economy can expand at extraordinary speed when reforms, investment and productivity gains reinforce each other.
That is the central argument behind the Equirus roadmap, assessed by ANI. The $20 trillion number itself is not enough. How India grows will matter as much as how fast it grows.
Services Could Become India's Biggest Growth engine
For India, services are expected to do much of the heavy lifting. The Equirus analysis sees services becoming an even larger part of the economy, with opportunities ranging from technology and Global Capability Centres to tourism and other high-value services.
India already has a strong position in IT and business services. The next opportunity is to widen that lead. Tourism, healthcare, digital engineering and other professional services could help India earn more from the global economy.
Equirus estimates that simply narrowing India's tourism gap with countries such as Turkey could generate an additional $21 billion a year in foreign exchange.
The report further says that more services exports mean more foreign exchange. More investment can mean more jobs. And higher productivity can push incomes and consumption higher.
20 Reforms For $20 Trillion
Equirus has laid out a 20-step reform agenda. The proposals cover a wide range of areas rather than betting everything on one sector. They include reforms involving urban governance, services, human capital, capital markets and the real economy.
Some of the recommendations are particularly striking. The report has suggested bringing fuel under the Goods and Services Tax framework. It has also called for state-level capital expenditure floors and proposed listing the Railways.
Other suggestions include creating a sovereign wealth fund, expanding private investment in education, encouraging private-sector research and development and deepening India's corporate bond market. Equirus also estimates that underlying rupee growth would need to rise to around 14.2 per cent.
However, the current depreciation in rupee makes the estimate looks too optimistic. "India becoming a $20 trillion economy by 2036 appears to be highly aspirational. Even at 12% nominal rupee growth, India reaches barely $9-10 trillion by 2036, half the goal. Also, INR appreciation defies reality: persistent trade deficits, oil dependence, higher inflation, and an RBI resisting a stronger rupee all point downward. Invoking China ignores that its 18 per cent streak rode peak globalisation: open markets, offshoring, WTO tailwinds. India faces fragmentation, protectionism, US tariffs, and friend-shoring instead. The China playbook worked in a congenial world that no longer exists," Purvi Mundhra, Deputy Vice President - Economist, Choice Institutional Equities, told NDTV.
What Does This Mean For Ordinary Indians?
A $20 trillion economy can sound like a distant government target. But the consequences could eventually be very real for households.
Faster growth can mean more jobs. A bigger services sector can create more opportunities for skilled workers. Better infrastructure can reduce the cost and time involved in moving people and goods.
A stronger investment cycle can also mean more businesses, more factories, more offices and potentially higher incomes.
Further, better education, skills and healthcare would be needed to ensure that India's large working-age population becomes an economic advantage rather than a missed opportunity.
"The key is consistency. The China experience demonstrates that sustained high growth can transform an economy at remarkable speed. For India, the real opportunity lies in maintaining the reform momentum strengthening infrastructure and capital markets, investing in human capital, accelerating the services economy and improving governance," said Abhishek Bhilwaria, Partner at BhilwariaFinserv.
