'India's economy has parallels to 2000s, when growth averaged over 8%'

The economists at Morgan Stanley also said the economy appears to have room for even further expansion, given the path for additional capital expenditure - especially from private businesses

Investment has become a major driver of India’s booming economy, according to economists at Morgan Stanley, adding that the country’s current expansion resembles that of the mid-2000s when growth averaged more than 8 per cent. 

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The economists also said the economy appears to have room for even further expansion, given the path for additional capital expenditure — especially from private businesses — rising exports and a more stable economy. 

After declining for a decade, India’s investment as a percentage of gross domestic product is steadily climbing and could reach 36 per cent by 2027 from a recent low of 28 per cent in 2021, economists including Chetan Ahya wrote in a note Tuesday. The upswing mirrors the period from 2003-2007, when India’s investment ratio rose to 39 per cent, they said.