Goldman Sachs: India to become world’s 2nd-largest economy by 2075, surpass US

India is set to become the world’s second-largest economy by 2075, leaving not just Japan and Germany but also the US behind, Goldman Sachs said in its latest report.

Currently, India is the world’s fifth-largest economy, behind Germany, Japan, China and the US.

Innovation and technology, higher capital investment and rising worker productivity will help India's economy in the coming years, the investment bank wrote.

Santanu Sengupta said that the key to drawing out the potential of India’s rapidly growing population is to boost the participation of its labor force.

India will have one of the lowest dependency ratios among large economies for the next 20 years, he said.

Goldman Sachs said in the report that this is an appropriate time for the private sector to scale up on creating capacity in manufacturing and services.

This will help in generating more jobs in the country and absorb a large labor force, the investment bank noted.

Net exports have also been a drag on India’s growth, because India runs a current account deficit, Goldman Sachs said.