India's economy will overtake both the US and Japan by 2075

According to a recent study, India's economy will overtake both the US and Japan to become the second-largest in the world by 2075. Investment bank Goldman Sachs (NYSE:GS). India will overtake China as the country with the highest population of 1.4 billion people. India currently has the fifth-largest economy in the world, behind the US, China, Japan, Germany, and the UK.

According to Goldman Sachs Research's India analyst Santanu Sengupta, during the next 20 years, India's reliance ratio will be among the lowest among regional economies.

Sengupta continued by saying that increasing labor force participation and giving training and skills to India's enormous talent pool are crucial to maximizing the potential of its quickly expanding population. He predicted that over the next 20 years, India will have one of the lowest dependency ratios among developed nations.

“So that really is the window for India to get it right in terms of setting up manufacturing capacity, continuing to grow services, and continuing the growth of infrastructure,” Sengupta explained.Furthermore, the research stated that enhancing worker productivity and innovation will be crucial to the world's fifth-largest economy.

According to the research, net exports have slowed growth because India has a current account deficit. The report emphasized that services exports contributed to reduce current account balances.

The survey said that India's economy is driven by domestic demand, with up to 60% of its growth defined as domestic consumption and investment, in contrast to several more export-dependent economies in the area.

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