Bharat stands on the cusp of a historic economic breakthrough, one that generations have only dreamed of. A recent report by Morgan Stanley, titled “India’s State-Led Economic Transformation,” paints a powerful picture of what lies ahead. It predicts that by 2028, Bharat will rise to become the world’s third-largest economy, surpassing economic giants like Germany and Japan. Even more remarkably, the nation’s GDP is expected to nearly double to a staggering $10.6 trillion by 2035.
This is not just about numbers; it is the story of a nation reclaiming its place on the world stage. It is the outcome of bold reforms at the state level, unprecedented infrastructure development, cities expanding at lightning speed, and the unstoppable rise of a confident, consumption-driven middle class. Bharat’s economic journey is no longer a distant vision; it is happening, and it is historic.
India surged past Japan and took the position to become the fourth-largest economy in the world, a position finally documented by NITI Aayog at the 10th Governing Council Meeting held on May 24, 2025. India’s GDP had crossed the figure of $4 trillion, NITI Aayog CEO said, making it the fastest-growing large economy in the world.
The International Monetary Fund (IMF) in its 2025 World Economic Outlook copied the same, putting India’s nominal GDP at $4.187 trillion, a hair breadth ahead of Japan’s $4.186 trillion. The IMF also put India at touching $5.58 trillion by 2028, leapfrogging Germany to become third-ranked worldwide.
State-Led Transformation
The Morgan Stanley report provides a model of state-led expansion, arguing that India’s 28 states and 8 Union Territories are the engines of national economic growth. Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka are identified by the report as being at the top of the list to become trillion-dollar economies by 2035 and have the potential to be among the world’s top 20 they were separately counted.
Maharashtra, Gujarat, and Telangana are currently the top three performing states by GDP size according to the latest figures, while Chhattisgarh, Uttar Pradesh, and Madhya Pradesh have recorded the highest improvement in state ranks in five years, it noted. The report also underscored the importance of competitive federalism because it noted that the ability of each state to woo capital, free up governance from red tape, and implement business-friendly measures is the driver of India’s macroeconomic destiny.
”Not only do states control their own budgets, but they also bid for investments by crafting policies and softening business conditions. In the end, each factory or enterprise ends up in a particular state,” the report highlights.
Infrastructure Investment is the decisive factor
Morgan Stanley sees a positive shift in capital spending over a period of ten years as the anchor of India’s surging economic growth. The central government’s capital spend has risen considerably in the last decade, more than doubling from 1.6 percent of GDP in FY2015 to 3.2 percent in FY2025, based on data from Union Budget. This consistent fiscal investment has brought incredible changes in the major infrastructure areas.
Road networks have witnessed a whopping growth of 60 percent, with double the number of functional airports in the country, improving air connectivity to hitherto unconnected regions. Metro rail infrastructure, which was originally restricted to a handful of metropolises, has since increased fourfold, reaching out to Tier 2 and Tier 3 cities and facilitating urban mobility issues.
These advancements have had a deep-running effect by lowering the costs of logistics, raising ease of transportation, and improving regional connectivity. The efforts of the government like PM Gati Shakti, the National Infrastructure Pipeline, Bharatmala, Sagarmala, and UDAN, have acted as key enablers for this change. These schemes of the center have been supplemented well by efforts at the state level in areas such as urban growth, electricity supply, and water infrastructure, forming a supplementary and synchronised growth paradigm.
As Morgan Stanley points out, ongoing coordination and collaboration between the central and state governments will be instrumental in maintaining this momentum. Such synergy is important not only in India’s efforts to meet its ambitious GDP targets but also in making the nation a global manufacturing and investment destination in the coming years.
India’s Global Role
The study also anticipates India to account for 20 percent of overall worldwide growth in the coming decade, becoming a major revenue driver for multinationals. The move is being driven by India’s deepening integration into global value chains and its geographical advantage as an alternative manufacturing base to China.
Government-sponsored Production Linked Incentive (PLI) programs have spurred industry growth in the areas of electronics, autos, and pharma. Concurrently, India’s capital markets have recorded strong foreign investment inflows, with benchmark indices performing better than most emerging economies over the past three years. These results are backed by resilient earnings, solid domestic consumption, and state-led infrastructure build-out.
Regional economies power national growth
The report says the destiny of India’s economy is in its states. While the Centre has a directional role, political and legislative freedom gives states the power to influence industrial and economic policy, drawing long-term investment.
Nine large states, Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Tamil Nadu, and Telangana, have a per capita GDP higher than the country average of $2,547. Four states, Assam, Gujarat, Karnataka, and Odisha, registered a 5-year real GDP compound annual growth rate (CAGR) greater than the country average of 6.1 percent.
Additionally, Assam, Bihar, Odisha, and Uttar Pradesh had reported capital spending ratios (as a percentage of GDP) higher than the national average of 3.2%, indicating a high degree of investment in infrastructure and public development. Such regional momentum, the report contends, will decide whether India can double its per capita income in seven years and foster balanced prosperity.
Forbes Insight: India’s economic juggernaut is unstoppable
A previous report by Forbes released on July 14, 2025, tells a similar story. The piece called “India’s Economic Juggernaut on Way to Becoming The 3rd Largest Economy” refers to India as a slow-starting but unstoppable juggernaut.
Based on a comprehensive report by Markets and Markets (MnM), Singh claims that India is aiming for $1 trillion GDP growth every 12-18 months, with a nominal GDP CAGR of 9 percent during the period from 2025 to 2047. The Forbes article imagines a $30 trillion economy by 2047, and India being one of the strongest economic superpowers of the world.
Singh highlights the importance of urbanisation, predicting that more than 70 percent of India’s GDP will originate from the cities by 2036. India’s urbanisation level at the present moment of 36 percent is predicted to reach more than 50 percent in the next decade, driven by the growth of megacities, megaregions, and economic corridors. To back this up, India is expected to invest more than $290 billion in infrastructure each year until 2030, mostly organised under the PM Gati Shakti National Master Plan that unites 16 ministries on a single digital platform.
Singh also points to India’s middle-class boom. The middle-class population will grow by almost 600 million between 2015 and 2040, covering 75 percent of India’s overall spending growth. This transition will raise millions out of poverty, reducing the number of poor households from 15 percent to a mere 6 percent by 2031.
Resilience in the face of Global challenges
India’s economic strength has been tested numerous times in recent times, from the COVID-19 pandemic to global inflation, geopolitical tensions, and supply chain disruptions in the world. India has come out even stronger despite these challenges.
The Indian economy accelerated 7.2 percent in FY23 and is poised to hold a 6.5 to 7 percent growth rate in the medium term. This gives India the title of the fastest-growing large economy in the world.
India’s foreign exchange reserves are still strong, inflation is under check, and the fiscal deficit is on a course of consolidation. India has also expanded its trade alliances and is an active participant in regional and international economic platforms such as the G20, BRICS, and IPEF.
India’s $10 trillion vision and beyond
Both Morgan Stanley and Forbes agree on a single point, India’s emergence is no longer a hypothesis, but a question of long-term implementation. If India continues on its current path, the nation not only will be the third-largest economy by 2028 but will become a world hub for manufacturing, investment, and innovation.
From NITI Aayog’s policy vision to state-level economic rivalry, from city megaprojects to an increasing middle class, each echelon of India’s economic and federal hierarchy is converging in harmony. Nevertheless, specialists warn that a successful journey to the $10.6 trillion goal will involve skillful managing of threats like climate shocks, geopolitical changes, and convergence gaps between rapidly growing and falling regions.
If they can be successfully solved, such obstacles will not only be overcome but might even turn into new levers of resilience and growth.
The decade of Bharat has begun
India’s rise from the 11th-largest economy in 2014 to the fourth in 2025 and set to become the third by 2028, is not just a statistical ascent but a testament to the power of vision, grit, and collective will. This incredible journey has been shaped not by chance, but by a deliberate blend of bold policy reforms, relentless infrastructure development, and the untiring momentum of its vibrant states.
The combined forecasts by Morgan Stanley and Forbes don’t merely offer projections; they tell the story of a nation awakening to its potential, rewriting its future with purpose. This is not luck. This is a strategy. This is governance with heart. This is Bharat rising.
As the nation marches confidently toward a $10.6 trillion economy by 2035, and eyes a transformative $30 trillion threshold by 2047, one thing is crystal clear: the elephant is no longer walking; it has begun to run.
And there’s no turning back now.
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