India is approaching a critical milestone in its economic evolution, with a new report from the State Bank of India (SBI) indicating that the country is likely
to enter the upper-middle-income category by the end of this decade. This transition would place India alongside countries such as China and Indonesia and mark a significant change in its income classification on the global stage. According to SBI, rising per capita income and sustained economic momentum are driving this shift. "India is set to touch $4000 per capita in another 4 years in 2030, to transition to an Upper Middle Income country and join China and Indonesia at the current classification," said SBI. A Long Journey, Now Gaining Speed India’s income progression has been gradual but consistent. It took the country nearly six decades to move from a low-income economy to a lower-middle-income one in 2007. During that long phase, per capita gross national income increased from $90 in 1962 to $910 in 2007, growing at a modest but steady pace. The years that followed saw a sharp acceleration. Economic expansion picked up significantly, reflecting stronger growth dynamics, structural changes, and rising productivity. This faster trajectory is also visible in per capita income levels, which crossed $1,000 in 2009, doubled by 2019, and are projected to reach $3,000 by 2026. Rapid Expansion Of The Indian Economy India’s overall economic size tells a similar story of momentum. The country took decades after Independence to become a $1 trillion economy, but subsequent milestones arrived much faster. The second trillion was added within seven years, followed by the third and fourth in progressively shorter time spans. If current trends hold, India is expected to surpass the $5 trillion mark within the next couple of years, claims the SBI report. On a global comparison, India’s growth performance has strengthened over the past decade. Its position within the worldwide distribution of average real GDP growth has improved, placing it firmly among the fastest-growing major economies, as per the report. What Lies Ahead On The Income Ladder Looking further ahead, the ambition of reaching high-income status by 2047 will demand sustained and robust growth in per capita income. While this goal appears challenging, SBI notes that India’s historical performance suggests it is not out of reach, provided reforms continue, and growth remains broad-based. For now, the nearer-term goal of entering the upper-middle-income group appears achievable. The income threshold for this category is significantly lower than that of high-income economies, and India’s recent growth record shows it has maintained similar momentum in the past. Globally, income classifications have shifted upward over time. World Bank data shows a decline in the number of low-income countries and a steady rise in upper-middle- and high-income economies, reflecting long-term development trends, added the report. India’s projected transition would place it firmly within this broader global pattern of economic advancement.
