India’s economy, when measured in Purchasing Power Parity (PPP) terms, is worth $15 trillion, according to NITI Aayog Vice-Chairman Suman Bery.
This places India at more than half the size of the United States economy, which stands at $29 trillion in PPP terms.
While India’s GDP at market prices is $4 trillion, Bery said the PPP figure offers a more accurate picture of national productivity.
Speaking at the Confederation of Indian Industry’s (CII) Annual Business Summit 2025, Bery stated, “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.”
PPP Offers Better Global Comparison
Bery explained that PPP represents the number of currency units required to purchase a common basket of goods and services.
This method allows a fair comparison of national economies relative to the United States.
Bery said economists prefer PPP for comparing labour productivity across countries. He stressed that India’s economy, in PPP terms, is around half the size of the US, giving a better sense of its global standing.
He noted that among G20 nations, India ranks lowest in labour productivity.
Bery highlighted the need to boost productivity to benefit from India’s demographic advantage.
“Our problem is our low level of labour productivity, not only with respect to the US but also to peers like China and ASEAN countries,” he said.
Call For Reforms & Competitiveness
Bery urged Indian states to take advantage of Free Trade Agreements (FTAs) signed by the Centre. He also pushed for global collaboration in innovation, reforms in labour markets, and skilling initiatives.
He said competitiveness must span both the manufacturing and services sectors. He added that poor growth in real incomes has led to a higher preference for government jobs.
Bery believes that improving labour productivity can reverse this trend and boost private employment.
He observed that India maintained a 6.5 per cent average growth rate from the 1991 reforms until COVID-19.
Bery credited this to institutional and policy-based resilience.
“Deep institutional sources of resilience are in place, but we mustn’t be complacent,” he said.
Bery pointed to industrialisation as a major challenge. He advised India to create its own development path while learning from China, Japan, and South Korea.
Bery concluded by stressing that India must “up its game” to meet future demands.
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