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India’s Consumer Market Poised to Become the World’s Third-Largest by 2027, Trailing Only the US and China

A recent report from research firm BMI has projected that India’s consumer market is on track to secure the position of the world’s third-largest by 2027, ranking behind only the United States and China. Currently holding the fifth spot globally, India is poised for an impressive ascent, driven by an anticipated 29% increase in household spending.

BMI, a subsidiary of Fitch Solutions, anticipates that this substantial growth will elevate India to the third spot on the global consumer market stage, demonstrating its growing economic clout. This trajectory reflects the rise in middle- to high-income households within the country.

In tandem with this ascent, the report suggests that India’s per capita household spending growth will outpace that of other developing Asian nations, including Indonesia, the Philippines, and Thailand, which achieved a 7.8% year-on-year growth rate.

BMI’s estimates project that India’s household spending will eventually surpass the remarkable milestone of $3 trillion. The driving force behind this surge is the expected annual increase of 14.6% in after-tax income through 2027. At that time, it is anticipated that 25.8% of Indian households will boast annual after-tax incomes exceeding $10,000.

Another critical factor fueling this surge in consumer spending is India’s sizable population of young individuals. Approximately 33% of India’s population falls within the age bracket of 20 to 33 years. BMI forecasts that this demographic segment will significantly contribute to increased consumer spending, particularly in the electronics sector.

As India’s consumer market continues its upward trajectory, it is poised to play a pivotal role in the global economy. The nation’s ascent to the third-largest consumer market in the world underscores the immense potential and opportunities that lie ahead for businesses and investors in the Indian market.

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