India becomes fifth largest economy in the world

The race continued throughout 2018 and 2019 when the Indian economy was rallying behind the UK and France to become the fifth-largest economy in the world in terms of nominal GDP. The World Economic Outlook of October 2019 officially puts India in fifth place after the USA, China, Japan, and Germany. The size of Indian economy is estimated by IMF as USD 2.94 trillion, while UK is USD 2.83 trillion and France is USD 2.71 trillion. It also means that except Germany, India is bigger than all European economies.

India’s rise is steep and dramatic. In 2010, India was in the 9th place while in just nine years in 2019, India reached 5th place. This shows a multifold increase in the GDP of India. If we measure in terms of Purchasing Power Parity (PPP) basis, the Indian economy overtakes two more players, i.e. Germany and Japan to sit in the third place with PPP basis GDP of USD 10.51 trillion.

The importance of the Indian economy for the world has increased so much that the IMF had to revise its global economic growth output due to a slight slowdown in the Indian economy in the last two quarters of 2019. However, the elephant economy is poised to grow again at a faster pace at 6.1% in 2019-20 and 7% in 2020-21, as per the report. Growth in emerging and developing Asia is forecasted by IMF to inch up slightly from 5.6% in 2019 to 5.8% and 5.9% in 2020 and 2021 respectively. India’s growth projection is also positively contributing to it, as India is no more a slow-moving elephant but has acquired swiftness along with its heavyweight.

One more interesting fact about the Indian economy is that its official Gold reserve has increased very fast over the period of time. In 1970, India had 213 tons of Gold which in 2019 stood at 613 tons valued at USD 65 billion. Currently, India’s Foreign Exchange Reserve stands at over USD 476 billion which is highest ever India has held. Noteworthy to mention that in 1990, India’s Forex depleted to only 4.8 weeks import bill. The first time it crossed USD 100 billion only in 2004. Today, India is much comfortable in the forex and gold reserve and enjoys good strength and stability of the economic base.