india is set to overtake japan and germany to become the worlds thirdlargest economy according to sp global and morgan stanley sps forecast is based on the projection that indias annual nominal gross domestic product growth will average 63 through 2030 similarly morgan stanley estimates that indias gdp is likely to more than double from current levels by 2031 india has the conditions in place for an economic boom fueled by offshoring investment in manufacturing the energy transition and the countrys advanced digital infrastructure morgan stanley analysts led by ridham desai and girish acchipalia wrote in the report these drivers will make india the worlds thirdlargest economy and stock market before the end of the decade india posted a yearonyear growth of 63 for the july to september quarter fractionally higher than a reuters poll forecast of 62 prior to this india recorded an expansion of 135 for the april to june compared to a year ago buoyed by robust domestic demand in the countrys service sector the country posted a record 201 yearonyear growth in the three months to june 2021 according to refinitiv data sps projection hinges on the continuation of indias trade and financial liberalization labor market reform as well as investment in indias infrastructure and human capital this is a reasonable expectation from india which has a lot to catch up in terms of economic growth and per capita income dhiraj nim an economist from australia and new zealand banking group research told cnbc some of the reforms cited have already been set in motion said nim highlighting the governments commitment to set aside more capital expenditure in the countrys annual expenditure books theres a clear focus by indias government to become a hub for foreign investors as well as a manufacturing powerhouse and their main vehicle for doing so is through the production linked incentive scheme to boost manufacturing and exports according to sp analysts the socalled plis which was introduced in 2020 offers incentives to both domestic and foreign investors in the form of tax rebates and license clearances among other stimulus it is very likely that the government is banking on plis as a tool to make the indian economy more exportdriven and more interlinked in global supply chains sp analysts wrote by the same token morgan stanley estimates that indian manufacturings share of gdp will rise from 156 of gdp currently to 21 by 2031 which implies that manufacturing revenue could increase three times from the current 447 billion to around 1490 billion according to the bank multinationals are more optimistic than ever about investing in india … and the government is encouraging investment by both building infrastructure and supplying land for factories morgan stanley said indias advantages include abundant lowcost labor the low cost of manufacturing openness to investment businessfriendly policies and a young demographic with a strong penchant for consumption said sumedha dasgupta a senior analyst from the economist intelligence unit these factors make make india an attractive choice for setting up manufacturing hubs until the end of the decade she said