KIEP sees India sustaining 7% growth, becoming World’s third-largest economy in five years

Oct 18, 2026

India’s economic growth outlook remains strong, with several institutions projecting real GDP growth of 7% or higher for the current or next fiscal year. In an interview, Kyunghoon Kim, Head of the India and South Asia Team at the Korea Institute for International Economic Policy (KIEP), discusses the factors driving India’s growth momentum and its medium-term economic prospects. Kim highlights India’s better-than-expected first-quarter GDP growth of 7.8%, supported by strong investment, resilient urban and rural consumption, government capital expenditure and improving export diversification. He also points to India’s approximately $730-billion foreign exchange reserves as a key buffer against global economic uncertainty. According to Kim, India could sustain growth of around 7% over the medium term. If this pace continues over the next five years, India could become the world’s third-largest economy. Watch the full interview for KIEP’s assessment of India’s GDP growth forecast, economic resilience, investment outlook and prospects for becoming the world’s third-largest economy.