Global banking giant Standard Chartered said that India could emerge as the world's third largest economy by 2030, benefiting from strong domestic demand and favorable demographics. However, the banking entity noted that country's reform agenda need to be sustained for achieving high growth.

Standard Chartered Global Research said that "India has the fundamentals to emerge a winner in the super cycle, potentially becoming the world's third largest economy by 2030. India is likely to grow faster, on average, than China over the next two decades."

As per International Monetary Fund data, in 2010, the world's major economies were USA (USD 14.6 trillion), China (USD 5.7 trillion) and Japan (USD 5.4 trillion). India did not figure among the top ten.

Standard Chartered said that by 2030, India will be at number three position with an economy of USD 30.3 trillion, behind China (USD 73.5 trillion) and US (USD 38.2 trillion). It said that the country's demographic advantage, with half its population below the age of 25 years, with rising per capita income will ensure strong domestic demand.

It said that "India has many of the features that will enable it to emerge as a winner in the super cycle. We believe the winners will be those countries which have cash, commodities, or creativity, or a combination of these factors. India does not have an abundance of cash or commodities, but it has creative potential."

Standard Chartered said that India has potential to catch up with China and the developed world. It added that "Based on our forecasts, India's nominal GDP could top USD 30 trillion by 2030, against its current level of around USD 1.7 trillion. By 2030, India could be 8.4 times bigger than it is today, while China is estimated to grow 4 times bigger and the EU and US 1.7 times."

The banking giant said that within India there is often a hesitation to anticipate the ability of the economy to grow at a faster pace. It said that "Often, consensus views of India's growth potential turn out to be too pessimistic. Thus, trend growth has often been assumed to be lower than that which materializes. Taking all of these factors together, our 9.3% projection for average Indian growth until 2030 may prove conservative. Trend growth, in my view, could even be nearer 12% to 13% per annum."

(Sourced from www.financialexpress.com)