Indian Economy by 2050

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As per a report entitled Wealth Report 2012 by Knight Frank and the Citi Private Bank, India is expected to become the biggest global economy by 2050. By that period Delhi and Mumbai are also going to be regarded among the leading 20 cities in terms of growth.

The report further states that India will attract a lot of investment from the super wealthy entities thanks to the following factors:

  • Standard of life
  • Standard of influence
  • Standard of knowledge
  • Standard of economic activity

Some of the other factors that can play a major role in India’s economic growth are economic stability, transparency in business operations, and quality of education systems. According to the High Net Worth Individuals (HNWI) who were included in the report’s research process, India can also become a global power in the future thanks to its transport and governance standards.

Union Budget 2012 and Life Insurance

The Wealth Report 2012 also states that in 2020 China would replace the US to become the biggest economy of the world and will stay in that position till 2050 when it gets replaced by India.

By that period, 90 percent of the leading cities in the world will be from China and all the top 20 cities will be in either India or China. The calculations have been done on the basis of GDP growth.

However, the richest people in the world still do not prioritize Indian cities – for them London, Paris, New York, Singapore, and Hong Kong are the major options. In the coming decade, though, Beijing and Shanghai will replace London and Paris in the list – at the moment these cities are fast climbing the rankings of preference of the high net worth individuals.

Knight Frank & Citi Private Bank have stated that the cities that will assume top position in 2050 will be the 400 cities that are presently being regarded as emerging market middleweights. These cities have a good rate of economic growth and their populations range between 200,000 and 10,000,000.

The new group includes many cities that are presently not that well known across the globe such as the following:

  • Linyi
  • Nagpur
  • Kelamayi
  • Concepcion
  • Guiyang
  • Belem
  • Surat

Nagpur and Surat are projected to do well by 2050. Experts are stating that these two cities are among the major cities driving global economic growth through reduction of poverty and expansion of global middle class. These cities are also helping to create new market openings for Indian and international organizations.

The report states that by 2050, India’s purchasing power parity will be equivalent to $85.97 trillion. In the same period China’s GDP will reach the $80.02 trillion mark and US’ GDP will amount to 39.07 trillion dollars.

Following are the other countries that will make up the top 10 list and their respective positions in parentheses:

  • Indonesia (4th)
  • Mexico (8th)
  • Brazil (5th)
  • Japan (9th)
  • Nigeria (6th)
  • Egypt (10th)
  • Russia (7th)

With regards to growth between fiscals 2010 and 2050, India will be the second best and its economy will grow at 8 percent in the said period. In the same time frame Nigeria’s growth rate will be 8.5%, which will it make the quickest when it comes to growth.

India attained the 4th spot in 2010 in global economic rankings with a worth of 3.92 trillion dollars. In that period the US was worth $14.12 trillion and China was worth $9.98 trillion.

European cities, which are known to be among the leading luxury markets of the world, have performed fairly well in the Prime International Residential Index (PIRI) price rankings of Knight Frank – 80 percent among the top 10 cities are from UK, Switzerland, and France.

As per Danny Quah, a professor with the London School of Economics the center of gravity of the global economy will be shifted between China and India by 2050. The concept of global economic center of gravity is a theoretical measurement of the central point of global economic activities and the calculations in this case are done on the basis of GDP.

The Wealth Report 2012 also states that India along with other countries such as Brazil, China, and Russia are contributing to the economic prosperity of property markets in Europe and North America such as Monaco and Miami. In the last couple of years both these continents have not performed well from an economic point of view but the continued inflow of wealth from these countries has helped them survive. This trend also shows the gradual shift in economic power.

Challenges facing India

Leading brands such as Cartier have stated that the high import taxes levied on luxury goods are among the several reasons that can deter such organizations from exploring the Indian market further. At present watches are 50 percent more expensive in India compared to other countries. They have stated that it is an unfortunate scenario and has led to many clients of luxury goods purchasing such products outside the country.

The prime markets in India are normally considered susceptible to the after effects of the economic conditions within the country. This happens as there are strict limits on international buyers means the possible safety net that comes from capital inflows from international buyers is absent in their case.

Leading Global Economies at present

As per the CIA World Factbook, following are the leading global economies with regards to the estimated nominal GDP:

CountryEstimated GDP in US dollars
The US15,171,000 million
China6,988,000 million
Japan5,866,000 million
Germany3,739,000 million
France2,919,000 million
Brazil2,407,000 million
The UK2,370,000 million
Italy2,135,000 million
Russia1,995,000 million
India1,954,000 million

Following are the leading economies of the world with regards with GDP (PPP) as per the CIA World Factbook:

CountryEstimated GDP in US dollars
The US15,040 billion
China 11,300 billion
India4,463 billion
Japan4,389 billion
Germany3,085 billion
Russia2,373 billion
Brazil2,284 billion
The UK2,250 billion
France 2,214 billion
Italy1,826 billion

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Last Updated on 29 March 2012