India’s economy, the third largest economy in the world in terms of purchasing power, is going to touch new heights in coming years.

As predicted by Goldman Sachs, the Global Investment Bank, by 2035 India would be the third largest economy in the world after the US and China.

It will grow to 60 percent of the size of the US economy. But, this booming economy of today has to pass through many phases before it can achieve yet another milestone.

According to the International Monetary Fund (IMF), as of 2013, the Indian economy is nominally worth $1.758 trillion; it is the eleventh-largest economy by market exchange rates, and is, at $4.962 trillion, the third-largest by purchasing power parity. With its average annual GDP growth rate of 5.8 percent over the past two decades, and reaching 6.1 percent during 2011-2012, India became one of the world’s fastest-growing economies.

Its position on the global stage as a vibrant democracy and an economic powerhouse is now a well-established fact.

The role of Asian economies over the past few years has only reinforced the strength and importance of India on the global center-stage.

Indian markets held on even as the economy battled against the global pressures of recession and showdown.

Exports fell sharply in the first half and the rupee remained volatile as it fought hard to find its new level.

The tide has turned and India is on a bounce back, thanks to its resilient business houses, industrious entrepreneurs and innovative workforce, who have fought hard showing their capacity to treat every challenge as a new opportunity.

Indian growth that had dipped to 5 percent is likely to be arrested to this level in this financial year even as green shoots are appearing to take the growth story on the recovery path in 2014.

The government has shown conviction in its policies and has worked toward opening up the economy with greater liberalization in several areas that have now attracted investments from foreign investors across the globe.

While opening up foreign direct investments (FDIs) in multi-brand retail has already seen some action with majors like Tesco planning to set up stores in India.

Further India’s decision to open up the aviation sector, a key infrastructure sector, has already seen three big investment proposals over a few months.

While Tata and Singapore Airlines are tying up for new services, another major airline has joined hands with Jet Airways even as low cost Air Asia begins new services for the Indian skies.

The total value of domestic deals in India during the third quarter of 2013 was $1.31 billion, up from $1.29 billion during the corresponding period of 2012.

While majors like British Petroleum has brought in the largest FDI in the energy sector, pharmacy majors and investments by Etihad in the Jet-Etihad deal and the Japanese in the Industrial corridor are telling instances of inbound investments.

In fact, the strength of a vibrant democracy coupled with a robust judiciary and regulatory framework has only added to the India story.

A market that has grown consistently adding new consumers every day even as technology is helping spread the depth and width of the markets.

Investors in India have to keep pace with the growing and varied demand, a market that challenges companies and investors almost on a daily basis.

Overseas direct investment by Indian companies stood at $3.24 billion in July 2013, registering an increase of 89.5 percent from $1.71 billion invested in June 2013, according to data released by the Reserve Bank of India (RBI).

The investments were made across 461 transactions. Reliance Communications, Apollo Tyres, Zee Entertainment Enterprises and Tata Communications, being the major investors.

A recent report by the US India Business Council (USIBC) has stated that Indian investments in the country has reached $11 billion and has generated over 100,000 jobs there.

Large investments in refineries, steel plants and transportation in African countries and other Asian economies have been the talking points in business circles.

As India moved on in search of energy security, companies like government owned ONGC and private majors like Reliance Industries and the Essar group to name a few invested in new oilfields and gas discoveries. Steel majors like Jindals and Essar too made their mark. Bharti Airtel, India telecommunication major, made inroads into the African continent as its spread its services touching lives of Africans.

Another case in point is TVS Motors that is planning to establish a two-wheeler assembly line in Uganda and launch two motorcycle models in the African nation.

The Europe India Chamber of Commerce (EICC), a body that promotes bilateral trade between the European Union and India, has recorded Indian companies to have invested $56 billion across the continent during 2003-2012, of which $38.47 billion was invested through mergers and acquisition transactions.

The report titled Indian Companies in the European Union: Reigniting Economic Growth also mentioned that Indian business houses employ 134,000 professionals in Europe, including 40,000 new jobs generated by 511 green-field investments. Tata Group is the largest employer in Europe, which counts about 80,000 employees across its 19 companies there. India accounts for a substantial 47 percent of the green-field investment and 63 percent of the employment creation in the UK, according to the report.

These numbers and statistics that find places in global dialogues go much beyond just official data. These are stories of how Indian business houses and investors have partnered with their counterparts across the globe to reach out to new investors and consumers. In fact, India’s journey on the global stage is a story of emerging economies that are set to change the rules of the game in this century.

The changing dynamics of the economic order that has made the world flat today will give an opportunity to show India’s strength as an economic and knowledge power even as it basks in its rich historical heritage. Also, India’s economy is projected to grow at a slower-than-expected rate of 5.3 percent this year, according to a United Nations report which said the country’s slowdown may have bottomed out.

The UN World Economic Situation and Prospects 2014 (WESP) report said a mild recovery in investment as well as stronger export growth will help in the gradual GDP pick-up.

Widespread state intervention and regulation largely walled the economy off from the outside world. An acute balance of payments crisis in 1991 forced the nation to liberalize its economy; since then it has slowly moved toward a free-market system by emphasizing both foreign trade and direct investment inflows.

India’s recent economic model is largely capitalist. India has been a member of WTO since Jan. 1, 1995.

In fact, it is important to note that the worst is over for India’s economy, though growth may reach its potential only next year, with GDP expansion likely to touch 5 to 5.5 percent this year and more than 6 percent in 2015, Moody’s Analytics said.

Prospects about the forthcoming general elections may lift business confidence and will be the trigger for the economy, which has stabilized after downside risks eased with the rupee and current account issues under control.

“The economy has stabilized in recent quarters, though GDP growth remains well below potential. Downside risks have receded. The rupee is less vulnerable to the US Fed tapering than it was in 2013. The economy will slowly improve across 2014 but not hit potential until well into 2015,” said a report titled, India Outlook: Steady Growth, Lower Risk.

Moody’s Analytics is a division of Moody’s Corporation that is engaged in economic research and analysis. The report is independent and does not reflect the opinions of its credit-rating wing, Moody’s Investors Service. On the other hand, “GDP growth will be in the 5 to 5.5 percent range through 2014, before heading north of 6 percent in 2015...the upturn will be led initially by exports, which started to lift from mid-2013, and then later in 2014, by an upturn in the investment cycle,” analyst Glenn Levine said in the report.

Levine said: “There is a growing list of reasons to believe that the economy has started to turn the corner, albeit slowly, after 30 months of sub-par growth. Economic growth has stabilized and downside risks have fallen.”

Stating that the worst may be over for the economy, Levine said the stream of bad news emanating from the economy has finally begun to slow. Externally, the global economy is stabilizing, with better growth expected this year.

On the top of all, the 486.6-million Indian labor force is the world’s second-largest, as of 2011.

The service sector makes up 55.6 percent of GDP, the industrial sector 26.3 percent and the agricultural sector 18.1 percent.

Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, and potatoes. Major industries include textiles, telecom, chemicals, pharmaceuticals, biotechnology, food processing, steel, transport equipment, cement, mining, petroleum, machinery, and software.

In 2006, the share of external trade in India’s GDP stood at 24 percent, up from 6 percent in 1985.

In 2008, India’s share of world trade was 1.68 percent; in 2011, India was the world’s 10th largest importer and the 19th largest exporter.

Major exports include petroleum products, textile goods, jewelry, software, engineering goods, chemicals, and leather manufactures. Major imports include crude oil, machinery, gems, fertilizer, and chemicals.

In fact, the growth of the Indian economy is somewhat unusual in that it has done so with very little export. Compared to a country like China that has relied heavily on manufacturing products for export, India has exported very little.

Most of the growth has been because of consumer demand within the country and by lots of travelers coming to India for health tourism. This has resulted in slower growth than China has had recently but it has also been more stable.

India came through the recent global financial crisis virtually unscathed because so little of its economy depends on foreign trade. One of the great strengths that India has as it attempts to grow its economy is its very good education system. India has become a major player in the high-tech field because of its highly educated workforce.

Unfortunately this education is very unevenly spread. A relatively small group of people receive a very good education while a larger group receives not that good education.

But, there are a few issues that are hindering the growth of the Indian economy that will need to be overcome.

The biggest is a lack of resources, particularly in the energy sector.

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The country is heavily dependent on resources imported from other countries.

The other big issue that will need to be dealt with is a need to improve the infrastructure.

This is especially true when it comes to things like electricity.

Averaging an economic growth rate of 7.5 percent for several years prior to 2007, India has more than doubled its hourly wage rates during the first decade of the 21st century.

Some 431 million Indians have left poverty since 1985; India’s middle classes are projected to number around 580 million by 2030. Though ranking 51st in global competitiveness, India ranks 17th in financial market sophistication, 24th in the banking sector, 44th in business sophistication, and 39th in innovation, ahead of several advanced economies, as of 2010. With 7 of the world’s top 15 information technology outsourcing companies based in India, the country is viewed as the second-most favorable outsourcing destination after the US.

On the other hand, India’s consumer market, currently the world’s 11th-largest, is expected to become fifth-largest by 2030.

India’s telecom industry, the world’s fastest-growing, added 227 million subscribers during the period 2013, and after the first quarter of 2013, India surpassed Japan to become the third largest smart phone market in the world after China and the US.

Its automotive industry, the world’s second fastest growing, increased domestic sales by 26 percent.

At the end of 2011, Indian IT Industry employed about three million professionals, generated revenues close to $100 billion equaling 7.5 percent of Indian GDP and contributed 26 percent of India’s merchandise exports. Likewise, the pharmaceutical industry in India is among the significant emerging markets for global pharma industry.

The Indian pharmaceutical market is expected to reach $48.5 billion by 2020, while its R&D spending constitutes 60 percent of biopharmaceutical industry.

Not only this, India is also among the top 12 biotech destinations of the world.

The Indian biotech industry grew by 15.1 percent in 2012-2013, increasing its revenues to $3.94 billion.

Driven by growth, India’s nominal GDP per capita has steadily increased from $329 in 1991, when economic liberalization began, to $1,265 in 2010, and is estimated to increase to $2,110 by 2016; however, it has remained lower than those of other Asian developing countries such as Indonesia, Iran, Malaysia, Philippines, and Thailand, and is expected to remain so in the near future.

According to a 2011 PricewaterhouseCoopers report, India’s GDP at purchasing power parity could overtake that of the US by 2045.

During the next four decades, Indian GDP is expected to grow at an annualized average of 8 percent, making it potentially the world’s fastest-growing major economy until 2050.

The report highlights key growth factors: a young and rapidly growing working-age population, growth in the manufacturing sector because of rising education and engineering skill levels, and sustained growth of the consumer market driven by a rapidly growing middle class.

But, the World Bank cautions that, for India to achieve its economic potential, it must continue to focus on public sector reform, transport infrastructure, agricultural and rural development, removal of labor regulations, public health and nutrition.

Despite persistent inflation pressures and a bit weak public finances, Moody’s Investor Service did not revise its outlook on India keeping it stable, and reassuring its confidence.

This is the success story of India today.