India is poised to cross a major economic milestone by the end of this decade, with a new report by SBI Research projecting that the country will transition into the upper-middle-income category by 2030. This shift would place India alongside China and Indonesia in the World Bank’s income classification and signal a significant rise in average income levels and economic resilience.
The report also forecasts that India will become the world’s third-largest economy by 2028, overtaking Germany, while maintaining its position as one of the fastest-growing major economies globally.
Global Income Landscape Is Shifting
The World Bank classifies countries into income groups—low, lower-middle, upper-middle, and high income—based on per capita Gross National Income (GNI) measured in US dollars. Over the past three decades, the global income distribution has changed markedly, reflecting widespread economic progress.
In 1990, out of 218 countries, more than 100 were in the low- and lower-middle-income categories. By 2024, the number of low-income countries had halved, while the count of upper-middle- and high-income economies expanded significantly. High-income economies now number 87, more than double their count in 1990, underscoring a long-term global shift up the income ladder.
India’s Gradual but Accelerating Rise
India’s own transition has been steady, though slower than some peers. The country took nearly six decades to move from a low-income to a lower-middle-income economy in 2007. During this period, per capita GNI increased from about US$90 in the early 1960s to roughly US$910, reflecting an annual growth rate of just over 5 percent.
Growth momentum strengthened in the years that followed. India reached a per capita income of US$1,000 in 2009, doubled it to US$2,000 by 2019, and is expected to cross US$3,000 by the middle of this decade. According to SBI Research, India is likely to reach the US$4,000 mark by 2030, enabling its transition into the upper-middle-income group.
Rapid Expansion of Economic Scale
India’s broader economic expansion mirrors this acceleration. It took around 60 years after Independence to build a US$1 trillion economy, but subsequent milestones were achieved at a much faster pace. The economy reached US$2 trillion in 2014, US$3 trillion in 2021, and US$4 trillion by 2025. At the current trajectory, India is expected to become a US$5 trillion economy by 2027–28 and could touch US$10 trillion by 2035–36.
This rapid scaling has also improved India’s relative global standing. The country has moved from 14th place among global economies in 1990 to fourth in 2025 and is projected to become the third-largest economy by 2028.
Strong Growth Performance and Reform Momentum
SBI Research noted that India’s growth performance over the past decade has improved even in relative global terms. The country’s position in the cross-country distribution of average real GDP growth has moved deeper into the upper end of the global spectrum, reflecting sustained high growth compared with most economies.
Looking ahead, the report aligns India’s long-term ambitions with the Viksit Bharat 2047 vision. To reach today’s high-income threshold by 2047, India’s per capita GNI would need to grow at an annual rate of about 7.5 percent—a pace that appears achievable given historical trends. However, if the high-income threshold rises to around US$18,000 by then, the required growth rate would be closer to 9 percent annually.
Assuming moderate population growth and stable inflation, this would translate into nominal GDP growth in dollar terms of around 11.5 percent over the next two decades. SBI Research emphasised that sustaining such momentum will require continued reforms to boost productivity, investment, and structural transformation.
Upper-Middle-Income Status Within Reach
The report concludes that India’s transition to the upper-middle-income category, which has a per capita GNI threshold of around US$4,500, is well within reach. The required pace of nominal GDP growth has already been achieved in earlier phases and remains attainable if reform momentum is maintained.
As India approaches the end of this decade, the expected income transition represents more than a statistical reclassification. It reflects rising living standards, a stronger economic foundation, and the cumulative impact of decades of growth-oriented policies—setting the stage for the next phase of India’s development journey.