By 2075, India will surpass not just Japan and Germany but also the United States to become the second-largest economy in the world, according to Goldman Sachs.

India has the fifth-largest economy globally, behind Germany, Japan, China and the US.

In addition to a growing population, the country’s advancements in innovation and technology, increased capital investment, and improved worker productivity are fueling the prediction, according to a recent analysis by the investment bank.

“Over the next two decades, the dependency ratio of India will be one of the lowest among regional economies,” said Goldman Sachs Research’s India economist, Santanu Sengupta, CNBC reported.

Sengupta said that increasing labour force participation is the key to maximising the potential of India’s rapidly expanding population. Moreover, Sengupta predicts that for the next 20 years, India will have one of the lowest reliance percentages among major economies.

“So that is the window for India to get it right in terms of setting up manufacturing capacity, continuing to grow services, continuing the growth of infrastructure,” he said.

According to Goldman, capital investment is another important engine of India’s growth.

“India’s savings rate is likely to increase with falling dependency ratios, rising incomes, and deeper financial sector development, which is likely to make the pool of capital available to drive further investment,” Goldman’s report said.

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