India Projected to Enter Upper-Middle-Income Bracket by 2030 as Economy Surges

2026-01-20 economy

Mumbai, Tuesday, 20 January 2026.
Poised to become the world’s third-largest economy by 2028, India is projected to reach a $4,000 per capita income, securing upper-middle-income status by 2030.

Charting the Path to Upper-Middle-Income Status

India is on a definitive trajectory to reshape its global economic standing within the decade. According to a comprehensive report released by State Bank of India (SBI) Research on Monday, the nation is projected to transition into the World Bank’s upper-middle-income category by 2030 [7]. This shift is underpinned by a forecast that India’s per capita Gross National Income (GNI) will reach approximately $4,000 within the next four years, placing it alongside economies such as China and Indonesia [1][5]. This progression marks a significant structural evolution for an economy that officially moved from the low-income to the lower-middle-income category in 2007, a status it has held while building macroeconomic resilience over the last two decades [1][2].

Accelerating Toward a $5 Trillion Valuation

The report highlights that income classification upgrades are trailing a rapid expansion in the broader economy. Having already crossed the $4 trillion GDP mark in 2025, India is now poised to become a $5 trillion economy by the 2027-28 fiscal period [2][5]. This growth velocity is expected to propel India to the rank of the world’s third-largest economy by 2028, overtaking Germany [4][7]. The acceleration in economic scale has been notable; while it took seven years to grow from $1 trillion in 2007 to $2 trillion in 2014, the leap from $3 trillion in 2021 to the $4 trillion milestone achieved last year occurred in just four years [2][7]. In terms of individual prosperity, per capita income is projected to touch $3,000 in 2026, up from $2,000 in 2019 [3][7].

The Long Road to High-Income Status

Looking beyond the immediate decade, SBI Research provides a roadmap for India’s ambition to achieve high-income status by 2047, the centenary of its independence [1]. To meet the current World Bank high-income threshold of $13,936, the nation must sustain a Compound Annual Growth Rate (CAGR) of 7.5% in per capita income [2][6]. This target appears feasible given that India’s per capita GNI expanded at a CAGR of 8.3% between 2001 and 2024 [2][6]. However, the report cautions that global benchmarks are dynamic. Should the high-income threshold rise to $18,000 over the next two decades, India would require a more aggressive per capita growth rate of 8.9% annually [6][7]. To support this, nominal GDP in dollar terms would need to expand by approximately 11.5% per year, assuming a stable population growth of 0.6% and a GDP deflator of around 2% [2][6].

Sources

India Economy SBI Research