India is projected to outpace the UK by the end of the year to become one of the world’s top five economies. It will then take it just six more years to overtake Japan as the world’s third largest economy, a new study suggests.

India’s gross domestic product (GDP) is expected to reach $5.9 trillion by 2025, according to the estimates of global consulting firm IHS Markit. The forecast plays into Indian Prime Minister Narendra Modi’s ambitious plan to make the country a $5 trillion economy in the next five years.

“Total Indian GDP is forecast to rise from $3.1 trillion in 2019 to $5.9 trillion by 2025, while the size of the Indian consumer market is forecast to increase from $1.9 trillion in 2019 to $3.6 trillion by 2025,” the report reckoned. It adds that the country is set to be one of the main drivers of growth in the Asia-Pacific region and will contribute greatly to global GDP growth.

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However, to enter the ranks of the world’s upper middle-income countries, India has to address several challenges, such as reforms to its legal system and labor market and development of its transport and power infrastructure, among other priorities, according to the report.

“Despite significant achievements in new infrastructure construction during PM Modi's first term, rapid infrastructure development in key sectors such as transport and power infrastructure remain important priorities, as well as reducing the regulatory burden of government red tape,” the IHS Markit analysis reads.

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Those priorities were highlighted in the latest annual Economic Survey published by the Indian government earlier this month. The document, set to serve as a roadmap to reach the $5 trillion objective, says that India’s growth should be driven by a “virtuous cycle” of savings, investment, and exports.

The consultancy stressed that, despite the existing challenges, the country’s economic outlook looks positive for Modi’s second term, with annual economic growth expected to stand at 7 percent over the 2019-2023 period.

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