British brokerage firm HSBC has said that India is likely to overtake Germany and Japan to become the third largest economy in the world by 2028, reported PTI. HSBC estimates that India will be a $7 trillion (Rs 448 lakh crore) economy by 2028, while the size of Germany’s Gross Domestic Product will be less than $6 trillion (Rs 384 lakh crore) and for Japan, $5 trillion (Rs 320 lakh crore).

“In over the next ten years, India will likely surpass Germany and Japan to become the world’s third largest economy in nominal United States dollars,” an HSBC note said. “The transition will happen even more quickly on Purchasing Power Parity basis.”

However, the firm warned that the country needs to be consistent in reforms and focus more on the social sector. “Spending on health and education is not just desirable for its [India’s] own sake, but is also central to economic growth and political stability,” HSBC said.

The firm added that India needs to focus on improving the ease of doing business in the country. It also said that India’s GDP growth rate, which will be lower in the 2017-18 financial year, will recover from the 2018-19 financial year.

India’s GDP is currently around $2.3 trillion (Rs 147 lakh crore), making it the fifth largest economy in the world.