India will overtake the United Kingdom this year to turn the fifth biggest economy and its gross domestic product (GDP) is projected to reach $5.9 tr in 2025 surpassing Japan and making it the third largest then, according to a recent report by IHS Markit. The Indian consumer market size is forecast to rise from $1.9 tr in 2019 to $3.6 tr by 2025.

India’s contribution to global GDP growth momentum will also increase and it will also play an increasingly important role as one of the Asia-Pacific region’s major economic growth engines, helping to drive Asian regional trade and investment flows, report citing the IHS Markit document.

Accelerating the development of new economy start-ups and growing new unicorns is a critical strategy for creating value-added and skilled jobs growth, according to the company. The rise in India’s population between 2015 and 2050 is projected at around 350 mn, creating significant fiscal challenges for the government to deliver adequate physical infrastructures like electricity, sanitation, affordable housing and public transport.

At the same time, India’s population growth rate is also projected to slow rapidly over the next two decades, resulting in gradual ageing of the population, bringing additional fiscal challenges relating to healthcare, pensions and social welfare for senior citizens.