New Delhi, July 24 -- India's aspiration to become the world's third-largest economy by 2028 and achieve a GDP of USD 10.6 trillion by 2035 will be shaped significantly by the economic performance and policy strategies of its states and union territories, according to a recent Morgan Stanley report titled 'Building Block of India's Prosperity'.

The report underscores the transformative role of subnational governments in accelerating India's rise as a global manufacturing hub, emphasising that state-level policy frameworks, fiscal capacity, and infrastructure development will be pivotal in sustaining long-term economic momentum.

Morgan Stanley projects that five leading states-Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnatak...