India’s road to becoming a $20 trillion economy requires a five-fold leap in a decade and reaching it will depend on 20 reforms or five engines — most of them already within the government’s toolkit, according to a growth policy report by Equirus.
2.3 trillion of budgeted capex unspent in FY26, could add close to 5.2 trillion to GDP without a rupee of new borrowing.
Liveability and governance: The report noted the importance of a $20 trillion economy being livable.
View full Image View full Image Five pillars of the $20 trillion leap ( Equirus Report )Funding: Does the growth pay for itself?
Growth in rupees, plus a firmer currency, is what bridges the final distance to $20 trillion in dollars,” it added.
India’s road to becoming a $20 trillion economy requires a five-fold leap in a decade and reaching it will depend on 20 reforms or five engines — most of them already within the government’s toolkit, according to a growth policy report by Equirus.
Writing in the report, Ajay Garg, CMD of Equirus Capital and Khushali Dutt, Associate Economist at Equirus Securities noted that the country took 67 years to build its first $2 trillion of GDP; then added the next $2 trillion in barely a decade.
Economic growth will depend on “how”, not “how fast” The report feels that the target of $20 trillion economy by 2036, demands that India grows roughly five times over in a little more than 10 years. It noted, “It can be done: China sustained close to 18% nominal dollar growth for 11 straight years from a comparable base. But a leap of this size will be decided less by the target itself than by the quality of the reforms that clear the path to it. How India grows will matter as much as how fast.”
View full Image View full Image India's GDP milestones ( Equirus Report )
As per the report, the share of agriculture in the economy — currently around 17% of GDP, is expected to continue decreasing as India urbanises, while manufacturing, at 17–20%, “is largely capped by a more protectionist world”.
“That leaves services (already 54% of GDP) to do the heavy lifting, rising past 65% and expanding from roughly $2 trillion to more than $11 trillion. Almost every reform worth making is, in one way or another, about clearing the path for that expansion,” it added.
Dimension Today Direction of Travel Agriculture `17% of GDP Falling share as country urbanises Manufacturing 17-20% of GDP Largely capped by a more protectionist world Services 54% of GDP Rises past 65%; ~$2tn → $11tn+ - the engine Note: All projections in this paper are labelled “Estimates.” Figures are the responsibility of the Equirus Research Team.
Five engines: 20 reforms needed The report divided the reforms into five major categories that “must fire together”.
Real Economy: For this, the report stated that the quickest wins will cost the exchequer almost nothing. It suggested:
A 10-year tax holiday for cold storage, which would attack a threadbare cold chain — only about 4% of India’s fruit and vegetables travel refrigerated, against 80–85% in the United States — and reclaim a share of the roughly 50 million tonnes of horticulture lost every year.
Bring fuel under GST as logistics quietly taxes India's smallest firms the hardest and eats up about 17% of output for the tiniest businesses but only 8% for the largest - MSMEs carry roughly twice the burden. A big reason is fuel sitting outside GST, where excise and cascading state VAT pile tax on tax.
A mandatory floor on state capital spending, after states left about ₹ 2.3 trillion of budgeted capex unspent in FY26, could add close to ₹ 5.2 trillion to GDP without a rupee of new borrowing.
2.3 trillion of budgeted capex unspent in FY26, could add close to 5.2 trillion to GDP without a rupee of new borrowing. And listing the Railways would free the roughly ₹ 2.8 trillion of taxpayer capital it absorbs each year.
Capital Markets: Here, the requirement is to unlock trapped money. It suggested:
An India Sovereign Fund on Singapore’s Temasek model could pool the roughly $249 billion of equity the government holds across public-sector companies into one professionally run vehicle, throwing off proceeds to fund capex and subsidies without new taxes or debt.
Levelling the tax treatment of bonds and equity would begin to deepen a corporate bond market that sits at just 18% of GDP against 130% for equities.
Taper small savings schemes it noted that administered savings rates (PPF ~7%, SCSS ~8%) stay high even when market yields fall. Gently tapering these schemes so even a fifth of the money (~ ₹ 4.9 trillion) flows into market-priced bonds would be enough to move the needle, while the schemes carry on through post offices in smaller towns to protect ordinary savers.
And a cluster of tax reforms — abolishing advance tax, cutting withholding to a flat 5%, ending the double transaction tax on shares — would release trapped working capital and bring India into line with global norms.
Cut TDS to a flat 5% as India withholds tax at source on investment income - often 10–20%, before the tax is even owed — then makes people wait 12-18 months for a refund. No comparable system exists for listed instruments in Singapore, Hong Kong or the US, where investors simply settle at filing. The refund trap locks up capital and quietly pushes foreign investors elsewhere.
Revive IDRs and become the financial hub of the Global South. India has the ingredients Singapore used to build SGX into Asia's listing hub — a large, fast-growing economy, an English legal system, and real credibility with the Global South.
End the double transaction tax. India is the only one of its peer markets that stacks two separate transaction taxes - STT and stamp duty - on the same cash-equity trade, while the US and Singapore levy effectively nothing on exchange-traded shares. STT alone brought in over INR 400bn in FY26, and Budget 2026 nudged it higher. Removing stamp duty on financial products and STT on cash equity (while keeping derivatives STT as an integrity measure) would stop taxing the participation of India's 180mn+ demat holders, tighten spreads, and remove a cost that would otherwise undercut the IDR ambition in Step 14. Human Capital: Here, it felt that the through-line is capacity. IT noted:
India’s education funnels are brutally narrow: around 187,000 students sit JEE Advanced for some 18,000 IIT seats, while hundreds of thousands head abroad for undergraduate STEM.
Revive private R&D. It noted that this is about 0.8% of GDP — the lowest in its peer group, and it's funded the wrong way round: roughly 80% public, 20% private, the mirror image of the US, China and Japan. The ask is to restore the 200% deduction and add grants tied to patents filed and commercialised, not just money spent.
The telecom template is instructive — once private capital was let in, access exploded and prices collapsed — and the same playbook can build education capacity at scale.
Reviving private research (India spends just 0.8% of GDP on R&D, the lowest in its peer group), funding universities on outcomes rather than headcount, and reviving apprenticeships complete the agenda. Services: The report called this India’s “quiet superpower” as the country already hosts over 1,800 Global Capability Centres (GCC), about half the world’s total.
A single empowered National GCC Policy could push that toward 5,000.
Scaling a tiny tourism-promotion budget and turning prime-ministerial visits into structured trade-and-tourism missions cost next to nothing.
Turn PM visits into trade-and-tourism missions IV · Services Engine. The reform makes every visit a commercial mission: bring the top importers and exporters along, run structured business matchmaking, time an “Incredible India” campaign to the visit, and sign a trade-facilitation commitment each trip.
Liveability and governance: The report noted the importance of a $20 trillion economy being livable.
Putting air pollution on a war footing, where 42 of the world’s 50 most-polluted cities are Indian; the economic cost runs near $95 billion a year, and roughly 1.67 million premature deaths are attributed to air pollution annually. The reform roughly triples the clean-air budget to ₹ 1,00,000 crore for the 20 most-polluted cities.
1,00,000 crore for the 20 most-polluted cities. A directly elected strong mayor can remove blurred accountability. At present a mayor and a commissioner have overlapping authority, and ward-level patronage in between. A directly elected strong mayor, chosen citywide with a fixed term, gives voters a clear line of accountability and a leader who can actually plan for the long term.
View full Image View full Image Five pillars of the $20 trillion leap ( Equirus Report )
Funding: Does the growth pay for itself? The report noted that a growth package this size will cost, noting that calculations show “it more than pays for itself in the very first year”. It estimated around ₹3.4 trillion of direct costs against about ₹7.9 trillion of direct gains — a net gain of some ₹4.5 trillion, or a 2.3x return.
“And much of the apparent “cost” is not revenue foregone at all. Abolishing advance tax or cutting withholding does not reduce what is ultimately owed; it only shifts the timing. The tax is still paid at filing. What changes is that vast sums of trapped working capital are released back into the economy,” it added.
Further, it feels that the currency does part of the work. “Because the target is denominated in dollars, the exchange rate carries part of the load. The reforms are built to lift rupee growth from a trend of about 10.5% toward roughly 14% — and, by improving the balance of payments, to turn the rupee’s structural depreciation into modest appreciation. Growth in rupees, plus a firmer currency, is what bridges the final distance to $20 trillion in dollars,” it added.
