Union Minister Ashwini Vaishnaw on Wednesday said India is poised to become the world’s third-largest economy in the next few years, driven by a decade of “well thought-through” structural changes and focused execution.
Speaking at the World Economic Forum 2026, Vaishnaw outlined a trajectory in which the country is expected to sustain a real growth rate of 6 to 8 per cent. He attributed this momentum to four strategic pillars: massive public investment in physical, digital and social infrastructure; inclusive growth to ensure that “the entire society grows along with the growth of the country”; a strong push for manufacturing and innovation; and a rigorous drive towards simplification.
“All this, combined with the base of technology that we have put in, we can very clearly say that India is going to grow with a 95 per cent confidence interval in the next five years,” Vaishnaw said, stressing that the “security of the poorest comes as a priority”.
Economist Gita Gopinath echoed this assessment, noting that “it’s a matter of a few years” before India reaches the milestone, barring a catastrophic event. Based on current calculations relative to other major economies, she said, “India gets there by 2028,” and potentially sooner depending on the forthcoming GDP rebasing.
However, Gopinath emphasised that the real challenge lies not just in the aggregate size of the economy, but in “raising per capita incomes to higher levels” to meet the 2047 goal of a developed India. While praising the “impressive” infrastructure expansion and GST reforms, she cautioned that sustaining growth will require addressing deepseated bottlenecks in land, labour and the judicial system.
Global instability and its potential impact on India’s domestic success also featured prominently in the discussion. Vaishnaw flagged the “mountains of debt” in advanced economies as a key external risk. “What’s really a matter of concern in our mind is the global debt in the rich world and how that debt will unravel,” he said, citing a recent “run on bonds” in Japan as a warning sign.
He cautioned that if such fiscal instability were to unfold on a larger scale, the spillover effects on India’s growth trajectory could be significant, despite strong domestic fundamentals and moderate inflation.
On the domestic front, structural reforms in land and labour remain critical for long-term productivity. Gopinath described land acquisition and the lack of clean titles as a “tremendous challenge” and a major “constraint on growth”. She also pointed to imbalances in the labour market, noting that only about 30 per cent of India’s growth since the 1980s has come from labour, reflecting a “fairly capital-intensive production structure”.
To fully harness the demographic dividend, she argued that “labour market flexibility is critical”, alongside a large-scale push for skilling. “It’s not just that firms aren’t creating jobs; there is a mismatch between the jobs that can be created and the skills of the labour force,” she said.
Responding to these concerns, Vaishnaw reiterated the government’s commitment to “cooperative federalism”, citing reform models emerging in states such as Andhra Pradesh and Maharashtra. He said the implementation of labour reforms and the opening up of sectors such as nuclear energy to private players were “major, major, major” steps towards modernisation.
Inviting global participants to share feedback on remaining challenges, Vaishnaw concluded, “We are here to be the catalyst for your growth in India.”
