Regardless of some of the pessimistic takes in this thread of the quality of engineering or institutions in India, the nation is still poised to be the world's most populous nation within five years* - surely a large free market, unhemmed by a giant firewall, would be a great incentive for innovation and enterprise?
It's certainly a lot more complicated than that, and India doesn't have a free market. That's precisely one of the biggest problems they need to resolve, their economy is hamstrung by backward, legacy regulations. Assuming they can reform their economy over time to make it more competitive, there's no question they'll have the world's third largest economy in 15 years.
If they don't reform it properly, the population alone guarantees very little. Just ask Brazil, Pakistan, Nigeria, Bangladesh or Indonesia. The outlook was supposed to be bright for Brazil, they were going to be a new economic juggernaut. They've spent the last five years rolling from one disaster to another, with their economy not net expanding for over a decade now. If the proper steps aren't taken along the way, it's easy enough to fall into that sort of trap as a developing nation trying to overcome an endless supply of challenges. The persistent diligence required to not fall backwards, is rather incredible (especially when you're competing with the first world, China, developing Asian economies like Vietnam, all of Latin America which similarly wants to keep progressing, and so on).
* http://time.com/3978175/india-population-worlds-most-populou...