Why everyone is bullish on India? A picture is worth a thousand words.

Indian hashtag#economy accounts for 3% of the world in 2023. The GDP of India is $3.7 T out of the $105 T of the entire world. Although India is the 5th largest economy in the world, the difference between the Big 2 (USA and China) and the next 3 (Japan, Germany, and India) is massive.

The largest economies in the world – The Big 2 & everyone else

1. USA – $26.9 T

2. China – $19.4 T

3. Japan – $4.4T

4. Germany – $4.3T

5. hashtag#India – $3.7T

The economic hashtag#growth is tepid in Japan and Germany because of the ageing population. The Japanese economy has hardly grown in the past 30 years. The German economic might is fading. India will overtake Japan and Germany and become the 3rd largest economy by 2027 with a $5T GDP. But that's just the start.

The gulf between India and China is immense. The Chinese economy is more than 5x that of India for a similar population size (1.4B people). China experienced phenomenal economic growth after joining the WTO in 2001. The developed world outsourced its manufacturing to China. It made China an economic superpower, second only to the USA.

But nothing lasts forever. Poor countries grow rich and vice versa. The economic cycle repeats. The Chinese sun is on the wane. As its population ages, its supercharged growth is coming to a screeching halt. Unlike the USA, China is not a destination for the smartest immigrants from other countries. It's on its own.

We often hear economists saying China will grow old before it becomes rich. It might be true.

This leaves India in an enviable position. While it might not achieve what China did (10% annual real growth for 30 years), a 6-8% real growth over the next 30 years is realistic.

It will reduce the gulf between India and the Big 2. Its share in the world GDP will increase from 3% to 10%. 

The world economy will roughly increase by $120 T ($223 T from $105 T) over the next 30 years. India will account for $18-19T of this increase. 

This represents immense opportunities to build wealth for the smartest investors. The world is long on India. So should be you :).