Commentary: Why India will become a superpower

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Next year, I gave seminars at the Consumer Unity and Trust Society in New Delhi on the subject of India’s economic potential.

I used a comparison of India and the poorest nation rated as “advanced” by the IMF, Greece, to illustrate the difficulty of becoming a high-income nation.

In 2023, India’s GDP per head at purchasing power parity ( PPP ) was just under a quarter of that of Greece. If Greek GDP per head grows at a mere 0.6 per cent ( its 1990-2029 trend, with IMF forecasts ) and India’s grows at 4.8 per cent ( its 1990-2029 trend ), India’s GDP per head would only be 60 per cent of Greece’s in 2047.

By 2047, Greece’s GDP per head would need to grow at a rate of 7.5 % a year if it were to do so in parallel with Greece’s GDP per head. That rate of growth would not be much lower than China’s from 1990 to 2012, when it attained the startling annual growth rate of 9 %.

The image of overall size is quite different. United Nations ‘ projections indicate that by 2050, India’s people may be 1.67 billion, against 1.32 billion in China and 380 million in the United States. It will be difficult for India to meet the US’s complete economic output given that it has more than four times the population.

Indeed, if India’s GDP were to grow at only 5 per cent a year to 2047 ( well below its 1990-2029 trend annual rate of 6.3 per cent ), and US GDP were to grow at 2.3 per cent ( its 1990-2029 trend rate, on a similar basis ), India’s economy ( at PPP ) would equal that of the US.