Mark Mobius: India has potential to become world's 2nd-largest economy

Not just the world's third-largest economy, India has the potential to become the second-largest economy if it remains on the current path of resilience and policy continuity, billionaire investor Mark Mobius said on Wednesday.

In just a few years, India has risen from being the world's 11th largest economy to the fifth largest. As of 2025, India remains the fifth-largest economy globally, trailing behind the US, China, Germany, and Japan in terms of total GDP.

According to the latest IMF estimates, India’s real GDP will be $4.3 trillion in 2025, just behind Japan’s $4.4 trillion and Germany’s $4.9 trillion. Given the growth trajectory, India is projected to surpass Japan this year and Germany by 2027.

Mobius told IANS that India has the potential to become even the second-largest economy in the world.

"India now has a substantially larger population than China. It is now estimated that China’s population is actually 800 million or less, with an average age much higher than India’s 1.2 billion people," he contended.

"If India is able to tear down import restrictions (both tariff and non-tariff), the manufacturing sector will boom and the economy will go from strength to strength," said the global investor who runs the Mobius EM Opportunities Fund for emerging markets (EMs).

On the Indian stock market’s recent performance despite global uncertainties, Mobius told IANS that even before the US trade restrictions, the Indian stock market had substantially corrected.

"There will be a recovery in the market, so it is a good idea for investors to slowly start averaging into good stocks, and if they are already holding stocks, it would be best to hold them and wait for the recovery," he suggested.

The Indian stock markets have made a stunning comeback as the single-day rally on Tuesday added a massive Rs 11 lakh crore to investors’ wealth -- erasing all the losses that followed the US tariff shock on April 2. The recovery was broad-based and driven by strong investor sentiment, boosted by global cues and domestic optimism.