India is on track to join the ranks of upper middle-income countries by the end of this decade, according to an analysis by the State Bank of India (SBI). The report projects that India’s gross national income (GNI) per capita will reach $4,000 by 2030, meeting the World Bank’s threshold for upper middle-income status. This would place India alongside countries such as China and Indonesia, which have already transitioned from low-income to upper middle-income economies over the past three decades.
World Bank Income Classification Trends
The World Bank categorises economies into four income groups, low income, lower-middle income, upper-middle income, and high income, based on per capita GNI measured in US dollars. According to World Bank data cited by SBI, the global income distribution has shifted significantly since 1990. At that time, out of 218 economies, 51 were classified as low income and only 29 as upper middle income. By 2024, the number of low-income economies had declined to 26, while the upper-middle-income group expanded to 54 countries. The number of high-income economies more than doubled to 87.
China, which had a per capita GNI of just $330 in 1990, moved into the upper-middle-income category by 2024. Indonesia followed a similar path during the same period.
India’s Gradual Income Transition
India’s income transition has been more gradual compared to several peer economies. The SBI report notes that it took nearly six decades for India to move from low income to the lower-middle-income category in 2007, with per capita GNI rising from $90 in 1962 to $910, representing a compound annual growth rate (CAGR) of about 5.3 percent. However, growth has accelerated over the past two decades. India became a $1 trillion economy after 60 years, doubled to $2 trillion within seven years, reached $3 trillion by 2021, crossed $4 trillion by 2025, and is projected to touch $5 trillion within the next two years. Per capita income crossed $1,000 in 2009, doubled to $2,000 by 2019, and is expected to reach $3,000 by 2026.
Improving Global Growth Standing
SBI highlights that India’s relative global growth performance has improved markedly. Its percentile rank in cross-country average real GDP growth has increased from the 92nd percentile over a 25-year horizon to the 95th percentile, indicating stronger performance compared to other emerging markets. Among major economies, the United States remains the world’s largest economy, followed by China, while India is projected to overtake Germany and become the third-largest economy by 2028.
Path to High-Income Status
Looking further ahead, SBI assessed India’s prospects for becoming a high-income country by 2047, in line with the government’s Viksit Bharat vision. Based on the current World Bank high-income threshold of $13,936, India would need to grow per capita GNI at a CAGR of 7.5 percent, which SBI considers achievable given that per capita GNI grew at 8.3 percent annually between 2001 and 2024. However, the report cautions that the high-income threshold is likely to rise. If it increases to around $18,000, India would need to sustain faster per capita income growth of nearly 8.9 percent over the next two decades.
Still, SBI concludes that India’s transition to the upper middle-income category—currently defined by a per capita GNI threshold of around $4,500 is well within reach, requiring nominal GDP growth of approximately 11.5 percent in dollar terms, a level India has achieved in the past.
