India is well-positioned to emerge as the world's third largest economy by 2025, but the long- term 9 percent growth target will not happen with a "business as usual" approach, prime minister Manmohan Singh said on Monday.

"India has been transformed into one of the fastest growing emerging markets in the world. If we can continue to grow at this rate, we are well positioned to be the country with the third largest GDP in the world by 2025," Singh said at the Golden Jubilee celebrations of the Indian Institute of Management (IIM) here.

He said many countries like China, Japan and South Korea have grown rapidly at 9-10 per cent rate for two or three decades.

"India is now capable of repeating the performance of this group of Asian countries," he said. However, it would not happen "automatically, by simply proceeding on a business as usual basis", he said.

The prime minister said nine per cent annual growth target being set out in the 12th Plan can be achieved, "provided we can do some of the difficult things needed to get there".

He said some of the challenges are consequences of rapid growth and the structural changes that it brings.

He said the global economy is facing uncertainties about industrialised countries and their implications for capital markets.

"Our own economy has also slowed down compared to last year and this year's growth may be around eight per cent or a little more, at best," he said.

Following the downgrade of the US credit rating, capital flows to emerging stock markets, including India, have been hit severely.