By 2030, India likely to become ‘upper middle-income’ country

New Delhi: India is likely to become an ‘upper middle-income’ country by 2030 with per capita income rising to over $4,000 from the current around $3,000, the State Bank of India (SBI) said in a research report on Monday.

As per the World Bank’s classification, India is currently placed in the ‘lower middle-income’ group, which it achieved in 2007.

According to the SBI Research analysis, India’s per capita income is likely to increase by $1,000 in the next four years. It took 10 years to increase from $1,000 to $2,000. The next $1,000 in the country’s per capita was added in 7 years.

India took 60 years to transition to ‘lower-middle income’ in 2007 from a ‘low-income country’. The country’s per capita gross national income (GNI) increased from $90 in 1962 to $910 in 2007, a CAGR (compound annual growth rate) of 5.3%.

“India can and will transition to the upper middle-income country, which has the threshold per capita GNI of around $4,500, in the next few years (assuming average growth of GNI per capita of around 8.3%),” noted the report authored by SBI Group Chief Economic Advisor Soumya Kanti Ghosh.

The country’s nominal gross domestic product (GDP) in dollar terms is required to grow an average 11.5% annually to achieve the $4,500 level by 2030. India’s GDP grew by an average around 10% in the US dollar terms between 2003-04 and 2024-25.

SBI Research noted that India can achieve the high income country status by 2047 with an average annual growth of 7.5% in the per capita income provided the threshold level is not revised by the World Bank.

“If we consider the current per capita GNI threshold for high income country of $13,936 to be reached by 2047 (as per government’s plan), India’s per capita GNI has to grow by a CAGR of 7.5%. This seems achievable as India’s per capita GNI has grown by a CAGR of 8.3% during the last 23 years (2001-2024),” it said.

However, the threshold level for a high income country is likely to change by then. If the threshold for a high income country gets changed to $18,000, then India’s per capita GNI needs to grow by a CAGR of around 8.9% in the next 23 years, it added.

India is likely to become the third-largest economy by 2028 surpassing Germany. In terms of nominal GDP, India transitioned from the 14th rank in 1990 to the 10th rank in 2014 and further to the fourth rank in 2025.