India: long-term views from a fixed income perspective
In Short
By Alexander Friis Illum, Senior Analyst, Global Evolution
Ambitious goals supported by demographics Prime Minister Narendra Modi has made it a public goal that India achieves high-income status by 2047, marking the 100-year anniversary of its independence. In 2023, the threshold for a high-income country is a gross national income (GNI) per capita of USD
14,005; India's was USD 2,540, placing it in the lower middle-income group. To reach its 2047 goal, India must raise GNI per capita by 5.5x over the next 23 years, or grow GDP an average of 8% annually. While ambitious, India's young population and favorable demographics support this potential.
Chart 1: GNI/capita in different scenarios
Clearly, 8% annual growth over a 24-year period is ambitious and may be overly so. However, a few factors speak in favor of India achieving extraordinary growth rates in the coming decades. Most notably, India’s demographics are very supportive of continued growth, contrary to most other major economies in the world. In Chart 2 we compare age-dependency ratios (the amount of people aged 0-14 and 65+ compared to the amount of people aged 15-64) for the 5 largest economies worldwide for the next 24 years as forecast by the UN.
Chart 2: Age-dependency ratio (2023-2047)
