India on fast track to upper middle-income status by 2030: SBI Research

NEW DELHI: India is accelerating up the global income curve, with the country set to become an upper middle-income economy by 2030, in step with its rise as the world’s third-largest economy by 2028, according to a new SBI Research report.

After taking six decades to climb out of low-income status, India’s growth engine has shifted gears. Per capita GNI, which stood at just $90 in 1962, crossed $2,000 in 2019 and is projected to touch $4,000 by 2030, putting the country within striking distance of the World Bank’s upper middle-income threshold of around $4,500, the report said.

The pace is telling. India reached $1 trillion in GDP in 60 years, added the next trillion in seven, the third in another seven, and the fourth in just four. At this clip, the $5 trillion mark is barely two years away. Nominal GDP growth in dollar terms of around 11.5 per cent, seen consistently before and after the pandemic, makes the climb achievable, SBI Research noted.

India’s growth credentials are also improving in relative terms. Over the decade ended 2024, the country ranked in the 95th percentile of global real GDP growth, up from the 92nd percentile over a 25-year horizon, placing it firmly in the upper tier of the global growth distribution.

The comparison with peers is stark. China and Indonesia have already made the leap to upper middle-income status, while countries such as Guyana have vaulted all the way to high income. India, which transitioned to lower middle-income only in 2007, is now compressing decades of growth into years, the report said.

Looking further out, India could hit high-income status by 2047 if per capita GNI grows at 7.5 to 9 per cent annually. The task is demanding but not implausible given performance over the past two decades. Manufacturing expansion, reforms and sustained investment will determine how quickly the gap closes.

For now, the direction is clear. India is no longer inching up the ladder. It is climbing faster, with momentum firmly on its side.