The country's economy is now $2.597 trillion, bigger than France's $2.582 trillion size, which was holding the position all this while
India has emerged as world's sixth biggest economy, latest listing by the World Bank showed.
The country's economy is now $2.597 trillion, bigger than France's $2.582 trillion size, which was holding the position all this while.
London-based Centre for Economics and Business Research predicted last year that India would turn into world's fifth largest economy, surpassing the UK by the end of 2018 while projections made by the International Monetary Fund which had said that India would be world's fourth-largest economy by 2022.
Manufacturing and consumer spending were the main drivers of the Indian economy last year.
"India's leap into the big six club is indeed a matter of great pride. This expected news comes as a morale booster for the markets since it indicates that the economy is powering ahead and the acceleration of the growth rate is round the corner. The pick up in demand and private investment happening now will further gain momentum," VK Vijayakumar chief investment strategist at Geojit Financial Services said.
The good news is being taken with a pinch of salt by a section of economists after reading the fine print.
"India's ranking has improved from seventh to sixth measured in dollar terms as our currency appreciated last year. With the currency appreciating by 4% in 2017, this helped India grow bigger than France," Nikhil Gupta, chief economist of Motilal Oswal Securities told DNA Money.
Snapping six consecutive years of depreciation, the rupee appreciated sharply in 2017 driven by strong capital inflows lured by India's economic and political stability which in turn made country's exports less competitive driving up imports, prolonging a slump in manufacturing.
But with the Indian rupee depreciating sharply this year and may do so more in coming days, India's ranking might slip back to seventh place again, Gupta said.
"Year to year changes in the nominal level of output or income of an economy are affected by a combination of forces: real growth, price inflation, and exchange rates. Changes in any of the three can affect an economy's relative size and, therefore, its ranking," World Bank has said in the notes to the ranking.
The rupee on June 28 dropped to an all-time low of 69.10 against the US dollar following concerns over tightening of global financial conditions, trade wars, rising crude oil prices coupled with worrying macroeconomic variables like current account balance and inflation.
That said, India has doubled its GDP within a decade and is expected to power ahead as a key economic engine in Asia, even as China slows down.
PIPING FRANCE
- $2.597 trillion – Size of India's economy
- $2.582 trillion – France's economy's size
- India would turn into world's fifth largest economy, surpassing the UK
- Manufacturing and consumer spending were the main drivers of the Indian economy last year
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