Global financial services firm Morgan Stanley on Wednesday said that India was likely to become a $6 trillion (Rs 6,00,000 crore) economy in the next 10 years, PTI reported. India will become the third-largest economy in the world, the brokerage firm said, mainly because of its efforts at digitisation.

“We estimate that digitisation will provide a boost of 50-75 basis points to Gross Domestic Product growth, and forecast that India will grow to a US $6 trillion economy and achieve upper-middle income status [a World Bank ranking of global economies] by by 2026-’27,” said Ridham Desai, the company’s India research head and equity strategist. Basis points is a common unit to measure interest rates in finance. One basis point is 1/100th of 1%, or 0.01%.

“We expect India’s real and nominal GDP growth to compound annually by 7.1% and 11.2%, respectively, over the coming decade.”

Citing a report, “India’s digital leap – the multi-trillion dollar opportunity”, that the firm released on Wednesday, Desai said that despite short-term problems such as the implementation of the Goods and Services Tax, India’s economic activity will improve in 2018.

India’s economy will have a market capitalisation of $1.8 trillion (Rs 1,80,000 crore) by 2027, he added. Desai also claimed that foreign direct investment into the country would grow significantly. “We project gross Foreign Direct Investment inflows amounting to US $120 billion (Rs 12,000 crore) by 2026-27, almost double the current 12-month trailing run rate of US $64 billion (Rs 6,400 crore),” he said.