India topping Japan economy no reason to smug, per capita GDP still lower: WEF ex-MD Claude Smadja

According to IMF data dated April 2025, India's GDP per capita of Rs 2,46,944 is approximately 8.5 per cent of Japan's GDP per capita of Rs 29,13,134, meaning Japan's per capita income is about 11.8 times higher than India's.

New Delhi: India is set to overtake Japan to become the world's fourth-largest economy, but must not become complacent, as the country remains far behind Japan in GDP per capita terms, WEF's former MD Claude Smadja said.

According to IMF data dated April 2025, India's GDP per capita of Rs 2,46,944 ($2,878.4) is approximately 8.5 per cent of Japan's GDP per capita of Rs 29,13,134 ($33,955.7), meaning Japan's per capita income is about 11.8 times higher than India's.

"Yes, it (economy size) is a good indicator because it gives a notion of the economic weight of the country on the global balance.

"No, it is not a good indicator because what counts is the per capita GDP. In terms of per capita GDP, India is far below Japan. So whether India has achieved this fourth position in the global economic balance... is a good indicator of progress being made, but it is not in any way any reason for complacency," Smadja told PTI in an interview.

On the contrary, Smadja argued, India's new economic standing should serve as a catalyst for accelerating reforms and ensuring that growth translates into higher living standards for all citizens, not just a burgeoning middle class in urban and rural centres.

Smadja, Chairman of Smadja and Smadja Strategic Advisory, said India stands at a pivotal crossroads in the global technology race, possessing a "unique superiority" in big data, ”an asset that the country must protect and strategically leverage to propel it into the top-tier of global tech and innovation.

He highlighted that India, alongside China, Europe, and the US, is one of the world's largest generators of data.

India's situation is distinctive, he said, thanks to widespread internet access, the proliferation of mobile phones, and the national single identity card system (Aadhaar), data is being generated at an "exponential" rate, touching every aspect of daily life.

"In India, we need to make sure that it protects this huge strategic asset because this is the basis from which it can build, to accelerate its innovation technology process, from which it can create new developments in disruptive technologies, and from which it can, in a way, build its position as being among the top two or three big data players in the world.

Apart from China, no country except India can have this kind of asset with respect to big data, Smadja said. But with this advantage comes vulnerability.

Smadja warned that the US tech giants and policymakers are eager to gain access to data, and with China sealing off its data ecosystem and Europe already on its radar, India could be the next potential target.

Smadja believes that India's data trove is the bedrock for the next wave of technological breakthroughs, including artificial intelligence and deep tech.

He urged that this resource be leveraged not just for elite innovation but to benefit the entire Indian population, including rural and remote communities.

"India has a tremendously innovative and dynamic startup and innovation ecosystem. So, whatever can be added in terms of policies to support the development of this ecosystem will tremendously benefit India.

"Until now, corporate India has been more prone to buying technologies than to create them. We need to have and see a much more intensive effort from corporate India to develop R&D technologies," Smadja noted.

India's young population remains a key asset, but Smadja stressed the urgent need to accelerate skill development and reskilling across the workforce.

Looking ahead, for India to become a USD 7-trillion economy by 2030, India must expand its industrial base, Smadja said.

Currently, the share of manufacturing in India's GDP is about half of what it is in China. This share is far too low given the country's size, population, and economic potential, he said.

Without a significant boost to manufacturing, Smadja said, India cannot hope to achieve the scale of economic growth required to reach the $7-trillion mark.

Ramping up R&D, fostering innovation, and accelerating the pace of development and productivity in the rural sector is also crucial, he said.

Increased rural productivity would not only boost the overall economic output but also enhance the purchasing power of rural populations, driving broader consumption and more inclusive growth.