India set to become upper middle-income country by 2030, third-largest economy by 2028: SBI Research

India is set to transition to an upper middle-income country by 2030 and is projected to become the world’s third-largest economy by 2028, according to a research report by State Bank of India (SBI).

The World Bank classifies countries as low income, lower-middle income, upper-middle income and high-income countries based on the country’s per capita gross national income (GNI) in US Dollar.

India’s per capita GNI is expected to reach around $4,276 by 2030, levels close to the World Bank’s current upper middle-income threshold of $4,495, according to the report.

The report noted that India took nearly six decades to move from a low-income country to a lower middle-income country in 2007, but the pace of economic expansion has accelerated sharply in recent years.

India achieved a per capita income of $1,000 in 2009, $2,000 in 2019, and is expected to reach $3,000 by 2026, it said.

According to SBI Research, India is now placed at the 95th percentile of average real GDP growth among developing and emerging market economies over the decade ended 2024, compared with the 92nd percentile over a 25-year horizon.

“In terms of nominal GDP, India transitioned from 14th rank in 1990 to 4th in 2025 and is set to become 3rd largest economy by 2028,” the report said.

India is likely to become a $5 trillion economy by 2027-28 and a $10 trillion economy by 2035-36, supported by sustained nominal GDP growth of around 11 per cent in dollar terms, similar to pre-pandemic levels .

The report also highlighted that India’s transition to an upper middle-income country is achievable if per capita GNI continues to grow at an average annual rate of about 8.3%, in line with the growth seen over the past two decades.

However, the threshold level for high income countries will also change by then.

“If the threshold for high income country gets changed to $18,000 then India’s per capita GNI needs to grow by a higher rate, CAGR of around 8.9% in the next 23 years for it to become the high-income country by 2047,” it said.

“India should continue its reform agenda so that we can get higher incremental growth required to reach the high-income bracket,” the report added.