India to be third largest economy by 2028: UBS
- IBEF
- November 12, 2025
India is projected to sustain potential real Gross Domestic Product (GDP) growth of 6.5% YoY between FY28-30, positioning it as the world’s third-largest consumer market by 2026 and the third-largest economy by 2028, behind the United States (US) and China, according to UBS. The report said India’s household consumption has nearly doubled in the past decade to Rs. 2,12,83,200 crore (US$ 2.4 trillion) in 2024, expanding at a 7.9% Compound Annual Growth Rate (CAGR) faster than China, the US, or Germany. Strong domestic demand, policy stability, and manufacturing reforms are expected to keep India’s growth momentum intact, making it the fastest-growing economy in the Asia-Pacific region in 2027, ahead of the Philippines (6.1%) and Indonesia (5.1%). UBS forecasts India’s GDP growth at 6.4% in FY27 and 6.5% in FY28, supported by fiscal prudence, GST reforms, and resilient private consumption.
UBS’s base case assumes that the US-India trade deal materialises, and tariffs are normalised by end-2025. Persisting trade penalties or a 25% tax on US payments to Indian outsourcing firms could trim GDP growth by up to 90 basis points in FY27. UBS expects inflation to rise modestly from 2.4% in FY26 to 4.3% in FY27, below the Reserve Bank of India’s (RBI) 4.5% forecast, and anticipates one more 25-basis-point rate cut before a pause.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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