India’s economy could reach $5.1 trillion by FY29 under a base case scenario, according to an analysis released Friday by OmniScience Capital, citing improving banking sector health and steady real GDP growth.
The investment firm projects nominal GDP growth of 8 per cent annually in US dollar terms, assuming 6.5 per cent real growth, 4 per cent inflation and 2.5 per cent rupee depreciation per year. Under an optimistic scenario of 7 per cent real growth and 2 per cent annual rupee depreciation, the economy could reach $5.9 trillion by FY29 and $11 trillion by FY35.
India’s GDP stood at $4.1 trillion in FY26, a nominal CAGR of just 5.4 per cent since FY19, well short of the 10.2 per cent annual growth needed to meet the government’s original $5 trillion target set that year.
OmniScience Capital attributes the shortfall to three factors: the 4.15 per cent GDP contraction in FY21 during the Covid-19 pandemic, the twin balance-sheet stress affecting banks and corporates, and a sharp 12.3 per cent rupee depreciation against the US dollar in FY26 alone.
The firm sees conditions turning more favourable. Real GDP growth averaged 7.4 per cent between FY22 and FY26, above the 6.2 per cent average of the preceding two decades. Bank balance sheets are at their healthiest in 20 years, and corporate balance sheets are positioned for capital expenditure, which the firm describes as a potential inflection point for sustained growth.