
Forecasting for a sustained 6.5 percent growth over the medium term, global brokerage UBS Securities has projected that Indian economy will almost double by financial year (FY 2031) to become a $6 trillion plus from the $3.8 trillion this fiscal. The optimism comes from their belief that the recent slowdown was cyclical and that the structurally the economy has no problems as of now.
The economy is on track to achieve 6.5% plus growth in the medium term (6.3% this fiscal) and expected to maintain potential growth of 6.5% annually through over FY 2028, making it the world's third-largest consumer market in 2026 and third-largest economy by 2027.
The GDP will expand from $3.8 trillion in FY25 to $6 trillion-plus by FY31, Tanvee Gupta Jain, the chief economist at UBS Securities India said in a note Monday. She believes this growth will be led by manufacturing, exports, and digitalisation, leading to improvement in productivity and efficiency gains.
On the turmoil that is sweeping the global geopolitics and trade after Donald Trump assumed office last week, she feels that the radical global policy shifts underway could offer new opportunities and strengthen the case for 'China + 1' supply chain shifts to India in the medium term.
Among the medium term challenges that the economy faces, she lists creation of jobs for the jobless millions along with a less friendly external environment and the automation overhang.
On the immediate term, she says the cyclical slowdown seen in the first half is behind us and a modest recovery is likely underway now which should help the economy close this fiscal with a 6.3% growth print.
She thinks the slowdown in the first half was cyclical and partly policy-driven both regulatory as well as fiscal, as government capex slowed due to the elections. Given that is behind us she says GDP to see a modest cyclical recovery towards 6.5% in the second half from 6% in the first half. This would bring full-year growth to 6.3% in FY25 – below the consensus 6.5%. This lower projection is based on an assumption that global growth slows from 3.2% in 2024 to 3.0-2.7% in 2025, and a 60% US tariff hike on imports from China from this September.