India's stock market will soar to $10 trillion by 2030 and the country's growth is impossible for investors to ignore, Jefferies says

• India's stock market is poised to more than double in value to $10 trillion by 2030, Jefferies says.
• Jefferies analysts also predicted the Indian economy would surpass Japan's and Germany's by 2027.

India's stock market is poised to skyrocket, more than doubling in value to $10 trillion by 2030, thanks to the country's surging economy and persistent reforms, analysts at Jefferies wrote in a note published Thursday.

With a value of $4.3 trillion, India's equity market is the world's fifth-largest, and Indian stocks have managed to consistently yield 10% annual returns over a 20-year period.

Even after that run of stunning equity returns, the Jefferies analysts said investors in the country's stock market could still expect returns of 8% to 10% in the next five to seven years.

"Assuming market returns in line with the last 15-20 year history and new listings, India will become nearly a U$10trn
market by 2030 - impossible for large global investors to ignore," the analysts wrote.

India has emerged as a hot spot for global capital inflows in recent years, especially as its longtime rival China struggles to keep investors from fleeing economic turmoil in the country.

China's flailing economy, its cratering stock market, and a never-ending property crisis have driven foreign investors to shift their focus to India, helping push the country's stock market 31% higher last year.

Meanwhile, India's financial-system reforms, favorable geopolitical dynamics, a growing entrepreneurial landscape, and the country's emphasis on services exports are all boosting its prospects for strong growth and stock-market returns. India's gross domestic product has seen a 7% compound annual growth rate in the past decade.

"Over the next 4 years, India's GDP will likely touch US$5trn making it the 3rd largest economy by 2027, overtaking Japan and Germany, being the fastest growing large economy with the tailwinds of demographics (consistent labor supply), improving institutional strength and improvement in Governance," the note said.

Correction: February 23, 2024 — An earlier version of this story misstated the year by which Jefferies analysts expect the Indian stock market to reach $10 trillion in value. It's 2030, not 2023.