At current growth rate, India’s Purchasing Power Parity (PPP) is set to overtake Japan by 2025 to rank third only after US and China. This prediction came from none other than Governor of BoJ (Bank of Japan), Toshihiko Fukui.
Incase, you are not clear of what PPP is, here is the excerpt from Wikipedia.
A purchasing power parity exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. These special exchange rates are often used to compare the standards of living of two or more countries. The adjustments are meant to give a better picture than comparing gross domestic products (GDP) using market exchange rates. This type of adjustment to an exchange rate is controversial because of the difficulties of finding comparable baskets of goods to compare purchasing power across countries.
In plain simple English, it is the purchasing power of country, after neutralizing the currency to global standards, thus
There are surely a couple of things that India has to watch to reach the goal, one, it has to loosen the restrictions on capital flow and two, develop bond markets to further integrate itself to global economy.