India Aims for USD 5 Trillion Economy by 2027, Surpasses Japan in Auto Market
Union Minister for Road Transport and Highways, Nitin Gadkari, on October 12, 2025, affirmed the government's ambitious goal of achieving a USD 5 trillion economy by 2027, with a vision to transform India into a developed nation by 2047. Speaking at the PHD Chamber of Commerce and Industry's 120th Annual Session, Gadkari highlighted significant progress in infrastructure development, which has reduced India's logistics costs from 16% of GDP and is projected to bring them down to around 9% by the end of 2025. He also noted the remarkable growth of India's automobile industry, which has surged to ā¹22 lakh crore from ā¹14 lakh crore in 2014, making it the world's third-largest automobile market, surpassing Japan. Gadkari expressed optimism that India could become a global leader in automobile manufacturing within five years through advancements in research, innovation, and the adoption of alternative fuels.
India Projected to Be Third Largest Economy by 2028
Adding to the optimistic outlook, former Reserve Bank of India (RBI) Governor Shaktikanta Das stated on October 12, 2025, that India is on track to become the world's third-largest economy by 2028. This growth, he explained, would be propelled by structural reforms, fiscal discipline, and robust macroeconomic fundamentals. Prasar Bharati Chief Dr. Navneet Kumar Sehgal further underscored India's economic strength, noting its consistent growth rate of 6.8 to 7 percent, a pace unmatched by any other major economy globally.
Consumption Recovery and Q2FY26 Earnings Outlook
Despite the overall positive long-term projections, a report by Axis Securities on October 12, 2025, indicated that broader consumption demand in India might require another quarter for a full recovery. The report anticipates mixed trends in Q2FY26 earnings for companies, aligning with the relatively soft performance observed in previous quarters. Factors influencing this outlook include mixed trends in US policies, depreciation of the Indian currency, slower export growth, the implementation of GST 2.0, and favorable monsoon conditions.
Merchandise Trade Deficit Widens in September
India's merchandise trade deficit is estimated to have expanded to $28.0 billion in September 2025, an increase from $26.5 billion in August. A report by Union Bank of India attributed this widening primarily to a significant surge in gold imports, which nearly doubled month-on-month, driven by the onset of the festive and wedding season. The report suggests the trade deficit is likely to remain elevated in the near term due to continued strong gold imports, firm energy demand, and reliance on electronics and capital goods imports.
International Trade Relations: RCEP Invitation and UK Ties
In a significant development, China extended an invitation to India to join the Regional Comprehensive Economic Partnership (RCEP), signaling a potential redefinition of bilateral trade and economic ties. While Beijing views India's participation as a means to boost exports and lower tariffs, New Delhi has historically maintained its distance from RCEP to safeguard domestic industries from a potential influx of cheaper Chinese imports. Meanwhile, India's economic relationship with the United Kingdom has deepened, with UK Prime Minister Keir Starmer's recent visit leading to defense, investment, and movie deals. India and the European Union also concluded their 14th round of talks for a free trade agreement.
Beer Industry Faces Aluminum Can Shortage
India's beer industry is grappling with a severe shortage of aluminum cans, posing a threat to supply and potentially leading to a revenue loss of approximately ā¹1,300 crore for the government. The Brewers Association of India (BAI) is urging for a "short-term regulatory relaxation" in quality control norms and deferred import certifications to prevent disruptions. The shortage is exacerbated by an annual deficit of 12ā13 crore units of 500 ml cans, accounting for nearly 20% of total beer sales.
Stock Market Advances Amidst FPI Inflows
The Indian stock market advanced on Friday, October 10, 2025, with the S&P BSE Sensex rising 328.72 points and the NSE Nifty 50 gaining 103.55 points. This positive movement was largely supported by renewed foreign portfolio investor (FPI) inflows and a general optimism surrounding the upcoming quarterly earnings season. However, weaker-than-expected September-quarter results from Tata Consultancy Services (TCS) somewhat capped broader gains.