India is poised to transition to an upper-middle income country by 2030 and is likely to emerge as the world’s third-largest economy even earlier, by 2028, according to a research report released by SBI Research on Monday. The report said India’s economic trajectory places it alongside countries such as China and Indonesia in the upper-middle income bracket, underscoring the pace and scale of its growth over the past decades. 

Gross National Income 

The World Bank classifies countries into four income categories—low income, lower-middle income, upper-middle income and high income—based on per capita Gross National Income (GNI) measured in US dollars. SBI Research highlighted that the global income distribution has shifted significantly over time, with more countries moving up the income ladder. 

In 1990, out of 218 countries classified by the World Bank, 51 were in the low-income category, 56 were lower-middle income, 29 were upper-middle income and 39 were classified as high income. By 2024, the number of low-income countries had fallen to 26 while lower-middle income countries stood at 50, upper-middle income countries rose to 54 and high-income countries increased sharply to 87.  

Gradual but accelerating 

India’s own journey has been gradual but accelerating. The country took nearly 60 years to move from a low-income to a lower-middle income economy in 2007. During this period, its per capita GNI rose from $90 in 1962 to $910 in 2007, translating into an annual growth rate of about 5.3 per cent. 

The report also traced India’s expanding economic size, noting that the country reached a $1 trillion economy about 60 years after Independence, crossed the $2 trillion mark in 2014, scaled $3 trillion in 2021 and touched $4 trillion in 2025. India is projected to become a $5 trillion economy in another two years, SBI Research said. 

$4,000 per capita income by 2030 

On a per capita basis, India achieved the $1,000 income milestone in 2009, followed by $2,000 in 2019 and $3,000 in another seven years. “India is set to touch $4,000 per capita income by 2030, enabling its transition to an upper-middle income country and placing it alongside China and Indonesia under the current classification,” the report said.   

SBI Research pointed out that India’s growth performance over the past decade has strengthened its standing globally. The country’s percentile rank in cross-country distribution of average real GDP growth has improved from the 92nd percentile over a 25-year horizon to the 95th percentile, indicating a deeper placement in the upper tier of global growth performers.   

Looking ahead, the report assessed the feasibility of India achieving high-income status by 2047, in line with the government’s “Viksit Bharat” vision. Based on the current per capita GNI threshold of $13,936 for high-income countries, India would need to sustain a compound annual growth rate (CAGR) of 7.5 per cent in per capita GNI. This appears achievable, the report said, given that India’s per capita GNI grew at a CAGR of 8.3 per cent between 2001 and 2024. 

A note of caution  

However, SBI Research cautioned that the high-income threshold is likely to rise over time. If the benchmark increases to $18,000 by 2047, India would need a higher per capita GNI growth rate of about 8.9%. Assuming average population growth of 0.6% and a GDP deflator of around 2%—based on averages for major economies—this would require nominal GDP growth in dollar terms of about 11.5 per cent over the next 23 years. 

“India should continue its reform agenda to generate the higher incremental growth needed to reach the high-income bracket,” the report said.