India To Become Upper-Middle Income Country In Four Years, Join China: SBI Report

India is expected to become an upper-middle-income country by 2030, and join China and Indonesia, which are in the same category, a report by SBI Research said. The report also estimated that India will become the third-largest economy by 2028 and reach a $5 trillion gross domestic product (GDP) by 2027-28.

By 2030, the per capita income of the country is estimated to reach $4,000 to join the World Bank’s upper-middle income category. This is based on gross national income (GNI) per capita trends and the country’s growth record over the past two decades, the report said. The report also said that India should become a $10 trillion economy by 2035-36.

According to estimates from the International Monetary Fund (IMF), India’s per capita GDP in 2025 stood at $2,820 and is expected to touch $3,050 in 2026. India entered the lower-middle-income category in 2007, after staying in the low-income category for about six decades.

How achievable are the targets

In 2018, India set a vision to become a $5 trillion economy by 2025, which has now been pushed back.  India is also on a roadmap to become a developed nation by 2047.

SBI Research said that India’s ability to become a high-income country by 2047 will depend on the rate of growth of per capita income. "If we consider the current per capita GNI threshold for a high-income country of $13,936 to be reached by 2047, India’s per capita GNI has to grow by a compound annual growth rate (CAGR) of 7.5 per cent,” the report said. The report showed confidence in India’s ability to achieve the 2047 target, given that the per capita GNI of the country has grown at a compounded annual rate of 8.3 per cent from 2001 to 2024.

However, the threshold to enter the high-income category is expected to rise over time. To this extent, the report said that “If the threshold for high-income countries gets changed to $18,000, then India’s per capita GNI needs to grow by a higher rate, CAGR of around 8.9 per cent in the next 23 years.”

On the basis of this, and assuming that the average population will grow around 0.6 per cent annually and have a deflator effect of about 2 per cent, India’s nominal GDP in dollar terms needs to grow by around 11.5 per cent annually over the next two decades, the report said.

According to projections by the Reserve Bank of India, India is expected to grow at a rate of 7.3 per cent in FY26 ending March. In FY27, India’s GDP is expected to grow at 6.4 per cent, as is the case for FY28, according to the IMF, much less than the required growth rate needed.

"Clearly, India can and will transition to the upper middle-income country, which has the threshold per capita GNI of around $4,500," the report said. It added that in order to achieve the higher growth required to enter the high-income category by 2047, sustaining reforms is critical.