India is poised to become an upper-middle income country by 2030 and the world’s third-largest economy by 2028, an SBI Research report says, signalling rapid economic ascent while renewing focus on inclusive, people-centric growth.
India is on the cusp of a significant economic milestone. According to a recent SBI Research report, the country is expected to transition into the upper-middle income category within the next four years and overtake major economies to become the world’s third-largest economy by 2028.
This projection reflects sustained growth momentum, rising per capita income and India’s expanding role in the global economic order.
The report comes at a time when India continues to post strong macroeconomic indicators despite global uncertainties. With steady GDP growth, resilient domestic demand and an evolving manufacturing and services base, India’s economic trajectory has drawn attention both at home and abroad.
However, economists and policymakers alike stress that the real test lies not only in growth numbers but in how equitably the benefits are shared.
What ‘Upper-Middle Income’ Means
The World Bank classifies countries into four income groups – low income, lower-middle income, upper-middle income and high income – based on per capita Gross National Income (GNI) measured in US dollars.
Moving into the upper-middle income bracket implies a substantial rise in average income levels, stronger consumption capacity and improved fiscal space for governments.
SBI Research estimates that India’s per capita GNI could approach the threshold required for upper-middle income status by 2030. This would place India alongside countries such as China and Indonesia, signalling a shift from a primarily developing economy to one with broader middle-income characteristics.
Analysts note that this transition is often accompanied by changes in consumption patterns, urbanisation and greater demand for quality public services.
Becoming the World’s Third-Largest Economy
Beyond income classification, the report projects that India could become the world’s third-largest economy by nominal GDP as early as 2028, trailing only the United States and China.
This would mark a dramatic rise from India’s position just a few decades ago and reflect its growing economic weight globally.
SBI Research attributes this potential leap to multiple factors: a large and young population, rising productivity, infrastructure investment and policy reforms aimed at improving the ease of doing business.
India’s expanding digital economy, growing exports and increased integration with global supply chains are also seen as key contributors to this growth story.
A Look at the Global Income Shift
The SBI report places India’s rise within a broader global transformation. In 1990, of the 218 countries classified by the World Bank, 51 were low-income economies, 56 were lower-middle income, 29 upper-middle income and 39 high-income.
By 2024, the global picture had changed markedly. Only 26 countries remained in the low-income category, while 50 were classified as lower-middle income, 54 as upper-middle income and 87 as high-income economies.
This shift illustrates how many countries have gradually moved up the income ladder over the past three decades, driven by growth, trade and structural reforms. India’s projected transition, therefore, aligns with a wider global trend of upward economic mobility.
Drivers of India’s Growth Story
India’s economic ascent has been powered by several structural and cyclical factors. Domestic consumption remains a major engine, supported by a growing middle class and rising urban incomes.
Public investment in infrastructure – roads, railways, ports and digital connectivity – has played a crucial role in crowding in private investment and improving productivity.
The services sector, particularly IT and digital services, continues to be a strong pillar, while manufacturing initiatives have sought to position India as a global production hub.
Demographic advantage also remains central to the narrative, with a large working-age population expected to support growth if matched with adequate skills and employment opportunities.
Challenges Beneath the Headline Numbers
While the projections paint an optimistic picture, economists caution against complacency. Rising average income does not automatically translate into reduced inequality or improved living standards for all.
Large sections of the population still face challenges related to employment security, access to quality healthcare, education and affordable housing.
There is also the risk of the so-called “middle-income trap”, where countries struggle to sustain high growth after reaching middle-income status.
Avoiding this will require continued reforms, innovation, investment in human capital and stronger social safety nets. Climate resilience and sustainable development will also be critical as economic activity expands.
What Officials and Analysts Say
SBI Research, in its assessment, underlined that India’s long journey from low-income to lower-middle income status took decades, but recent progress has been faster due to reforms and macroeconomic stability.
Analysts echo this view, noting that policy continuity and targeted interventions will be essential to maintain momentum.
Government officials have previously highlighted India’s ambition to become a multi-trillion-dollar economy, emphasising infrastructure development, manufacturing growth and digital inclusion as key priorities.
Experts, however, stress that growth must be accompanied by job creation and improvements in social indicators to ensure long-term stability.
The Road Ahead
As India moves closer to these economic milestones, the focus is likely to shift from how fast the economy grows to how well it grows. Bridging regional disparities, supporting small businesses and ensuring that rural and marginalised communities are not left behind will be central to sustaining progress.
The coming years will test India’s ability to convert macroeconomic success into meaningful improvements in everyday life – from better schools and hospitals to safer jobs and cleaner cities.
The Logical Indian’s Perspective
India’s projected rise to upper-middle income status and a top global economic ranking is a moment of collective optimism. Yet, true progress cannot be measured by GDP rankings alone.
Growth must be inclusive, humane and sustainable, rooted in empathy and opportunity for all.
