New Delhi: NITI Aayog Vice-Chairman Suman Bery on Thursday said that the size of the Indian economy in the purchasing power parity (PPP) term is already $15 trillion, which is more than half the size of the US economy.
The purchasing power parity (PPP) is the amount of currency units required to purchase a basket of goods and services that can be purchased with one unit of the reference economy’s currency.
“There has been a lot in the newspapers about our being the fourth largest economy. Those are all measured at market prices, but the real way of measuring productivity is purchasing power parity.
“And while we are $4 trillion GDP at market prices, at PPP term, we are $15 trillion economy,”Bery said while addressing the Annual Business Summit 2025 of the Confederation of Indian Industry (CII).
He said that economists tend to measure labour productivity at purchasing power parity as PPP measures the real size of the economy of countries against the size of the US economy. “And so while we (the size of India economy in PPP term) are at at $15 trillion, the United States is at $29 trillion.
“So we are roughly half the world size of the US economy,” he said. Bery said India needs to diversify its sources of supply, so the country would not have to depend on a particular supplier. He also suggested that India should leverage global knowledge and innovate locally, while reforming markets and building skills.
The NITI Aayog vice chairman also emphasised that the states should utilise opportunities of Free Trade Agreements (FTAs) which were signed by the Union government.
He said competitiveness should not only be restricted to manufacturing but should extend to services as well.
Bery said India’s labour productivity is the lowest among the G20 nations and a sustained rise in productivity of labour is crucial for India to leverage its demographic dividend.