Oct 9th 2025|4 min read
How rich must a country be to count as “developed”? The question is preoccupying India’s government, which wants India to attain the status by 2047, the 100th anniversary of its independence from Britain. Narendra Modi recently suggested the government was aiming for a $10trn economy by the centenary year. That was a retreat by the prime minister from earlier rhetoric. In 2022 Piyush Goyal, the commerce minister, aimed for a $30trn economy, a goal echoed by NITI Aayog, the government’s in-house think tank.
The dollar value of India’s GDP in 2047 will depend on the value of its economy and the exchange rate between the rupee and the greenback. At today’s rates, India has a GDP of $4.2trn. Raising that to $30trn would mean growth of over 9% a year for the next 22 years. That might sound difficult, but India ought to receive help from a real appreciation in its currency; as it gets richer, prices will converge with America’s, resulting in a bigger economy in future rupee terms, a dearer currency or both. The IMF forecasts that India’s economy will be worth $6.8trn by 2030. So Mr Modi’s goal of $10trn by 2047 should be a doddle.
A better approach, minimising the influence of currency fluctuations, would be to aim for a developed-country standard of living rather than a big dollar number. That would mean focusing on the real economic-growth rate, adjusted for changes in prices, and the level of GDP per person instead of the total size of the economy.
There is no official definition of a developed country. The division of the world into “developed” and “developing” dates back to the presidential inauguration speech of Harry Truman in 1949. It overlapped with a cold-war split into the first world, aligned with America; the communist second world; and a non-aligned, mostly poor third world, including India. Today the term “Global South”, which has more to do with positions in the global income distribution, is often used.
Two institutions might nevertheless provide a yardstick. The World Bank aims for a national income per person of $14,000 before granting high-income status. This is an inflation-adjusted version of a line it drew in 1989 to include countries it thought “industrialised”. Another might be membership of the OECD, described by this newspaper as “a club of mostly rich countries”. Its poorest member is Colombia, with a GDP per person of $8,000.
Holding prices constant, a $10trn economy in 2047 would not be enough for India to be considered rich by either measure. The UN expects it to be home to 1.7bn people by then; such an economy would equate to a GDP per person of $6,000—double today’s level but also only about the same as modern Iraq. It would place India in the World Bank’s upper-middle-income category. Achieving entry to the high-income group would require India’s GDP per person to quintuple in the next 22 years at a growth rate of 7.5% a year, above the average of 5.7% seen so far under Mr Modi.
The World Bank uses a smoothed three-year average of market exchange rates to assess countries. Adjust India’s current GDP per person using purchasing-power-parity (PPP) measures instead, which capture differences in prices for the same goods, and India already has a GDP per person of $12,000, compared with $22,000 for Colombia. Meeting the poorest-OECD-member threshold for living standards would therefore only require GDP per person to less than double in real terms by 2047. A stricter criterion would be to compare India with Bulgaria, a new member of the World Bank’s high-income club, which has a PPP-adjusted GDP per person of $41,000. Getting there would mean real growth of about 6% a year.
Can India do it? The country’s recent performance suggests just maybe. But there are reasons to doubt official figures, says Arvind Subramanian, a former government adviser. He thinks they understate how much growth is actually a rise in prices and overstate improvement in the informal economy. If he is right, Colombia may be a more realistic target than Bulgaria. Indians will have to decide for themselves if that counts as “developed”. ■
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