India may emerge as the 2nd-largest economy in price parity terms by 2038: EY report

India is emerging as one of the most dynamic among the world’s five largest economies, with strong economic fundamentals including high savings and investment rates, favorable demographics, and a sustainable fiscal position, the EY report said. Despite global uncertainties such as tariff pressures and slowing trade, India’s resilience stems from its reliance on domestic demand and increasing capabilities in modern technologies, it added.

“Among the largest economies, India stands out with a median age of 28.8 years in 2025, the second-highest savings rate, and a government debt-to-GDP ratio projected to decline from 81.3% in 2024 to 75.8% by 2030 unlike peers where debt levels are rising,” the EY report noted.

“India’s comparative strengths, its young and skilled workforce, robust saving and investment rates, and relatively sustainable debt profile will help sustain high growth even in a volatile global environment. By building resilience and advancing capabilities in critical technologies, India is well-placed to move closer to its Viksit Bharat aspirations by 2047,” DK Srivastava, Chief Policy Advisor of EY India, said.

India’s trajectory is reinforced not just by demographics but also by structural reforms and resilient fundamentals, the EY report stated. “High saving and investment rates are fueling capital formation, while fiscal consolidation is improving sustainability. Reforms such as GST, IBC, financial inclusion through UPI, and production-linked incentives are strengthening competitiveness across industries. At the same time, public investment in infrastructure and adoption of emerging technologies like AI, semiconductors, renewable energy are setting the stage for long-term resilience,” it said.