India is firing on all cylinders. The headline from February is that retail inflation has eased to 3.61 per cent, falling below the 4 per cent mark for the first time in six months. Inflation is expected to remain below the 4 per cent threshold, allowing the Reserve Bank of India to cut interest rates further.

RBI cut policy rate by 25 basis points to 6.25 per cent in February. Another rate cut, potentially of 25 basis points, is expected in April. Importantly, the Union Budget presented for the upcoming fiscal has laid strong emphasis on boosting consumption, for which the government rolled out sweeping income tax cuts. This has provided India’s burgeoning middle class with sufficient legroom to boost spending.

The past week has seen several international financial and investment firms reaffirm their bullishness on India. For starters, Morgan Stanley in its latest report said India is on its way to become the world’s third-largest economy by 2028 as its share in global production rises, driven by macro stability influenced policy and better infrastructure.

The Indian economy is projected to expand to $4.7 trillion by 2026, which will make it the fourth largest in the world behind the US, China and Germany. In 2028, India will overtake Germany as its economy will expand to $5.7 trillion. Consequently, India’s share in the world GDP is projected to rise from 3.5 per cent to 4.5 per cent in 2029.

Morgan Stanley’s GDP per capita projections for India are quite positive. It projects three scenarios for India’s growth: Bear — where the economy expands to $6.6 trillion by 2035 from $3.65 trillion in 2025;........

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