India – plenty of light, but also some shadows
With a growth rate of around 7%, India was one of the stars of the global economy last year.
Commerzbank Research
05/09/2025
India: one of the growth stars of recent years...
In view of the Trump administration's aggressive tariff policy, many companies are looking for new export markets. Even the recent flare-up in the conflict with Pakistan is unlikely to change the fact that India often finds itself at the center of attention in this regard. After all, India's economy has regularly shown one of the highest growth rates worldwide in recent years. Not only did it exceed the global average, but in the last four years – i.e. after the temporary setback due to the coronavirus pandemic – it also significantly exceeded the average in Asia, even if the slower-growing developed economies of Japan and Korea are not taken into account. As a result, India's total economic output has more than doubled in the last 12 years.
Based on current exchange rates, India is now the world's fifth-largest economy, and the International Monetary Fund expects the country to overtake Japan and Germany by 2030, moving into third place. Based on purchasing power parities, India has long since achieved this position.
... due to strong population growth...
Economic development is undoubtedly favoured by the still-rising population. Although the population is no longer growing quite as rapidly as in the first ten years of this millennium, when the number of inhabitants rose by more than 1.5% each year, India's population continues to grow very strongly, with an annual increase of almost 1%.
According to World Bank estimates, India's population will continue to grow from the current 1.4 billion to 1.7 billion by 2050. This is in contrast to most Western economies and China, where the population is expected to decline. The working-age population in India will also increase from around 960 million at present to around 1.1 billion by 2050.
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