India could become a $20 trillion economy by 2036 if it manages to raise underlying rupee growth to around 14.2% and sustain annual rupee appreciation of 3-3.6%, according to a research report by domestic brokerage Equirus.The report has proposed a 20-step reform agenda aimed at lifting India’s growth trajectory, strengthening the external balance and creating the conditions needed to achieve the ambitious dollar-denominated target.India’s economy is currently estimated at around $3.7 trillion. Reaching $20 trillion in the next decade would require the economy to expand roughly 5.5 times and sustain nominal dollar growth of about 18% a year, significantly above its historical trend of around 10-11%, the brokerage said, according to news agency ANI.
Services need to drive India’s next phase of growth
Equirus said the composition of India’s growth would be as important as its pace, with services expected to become the main engine of expansion.Services currently account for about 54% of GDP and would need to contribute more than 65% as India moves towards the $20 trillion milestone. The sector’s economic output would have to increase from roughly $2 trillion to more than $11 trillion, the report estimated.Manufacturing, meanwhile, could face constraints from a more protectionist global trade environment, while agriculture’s share of GDP is expected to decline as urbanisation accelerates.India has already recorded a sharp acceleration in its economic expansion. It took the country 67 years after independence to build its first $2 trillion economy, while the economy nearly doubled during the decade after 2014.
20 reforms target taxes, capital markets and human capital
The proposed reform package spans the real economy, capital markets, human capital, services and urban governance.Among the measures suggested by Equirus are bringing fuel under the GST regime, setting minimum capital-expenditure floors for states, listing the Railways, creating an Indian sovereign fund, expanding private education capacity and reviving private-sector research and development.The report also calls for deeper corporate bond markets and measures to reduce tax-related working-capital pressures.It estimates that abolishing advance tax could release around Rs 10 trillion of working capital, while moving to a flat 5% TDS could unlock another Rs 13.4 trillion.The reforms are intended not only to increase economic activity but also to improve the efficiency with which capital is deployed across the economy.
GCCs, tourism seen as major growth opportunities
The report puts particular emphasis on India’s services economy, including global capability centres (GCCs).A proposed National GCC policy could increase the number of GCCs in India from more than 1,800 to 5,000, potentially generating an economic impact of $470-600 billion and creating 20-25 million jobs, Equirus estimated.Tourism is another area identified as having significant potential. Greater promotion of the sector could potentially add around $21 billion a year in foreign exchange receipts, the brokerage said.Overall, Equirus estimates that its reform package could generate about Rs 7.9 trillion in annual direct gains, against costs of roughly Rs 3.4 trillion. This would result in an estimated net annual gain of Rs 4.5 trillion.The report cautioned that reaching $20 trillion would ultimately depend on execution across several areas rather than any single policy measure.Sustaining rapid growth while improving the rupee’s external value and expanding high-productivity services would be central to India’s ability to meet the 2036 target.
