Indian leaders, mainstream news media, government supporters, and many world leaders and global institutions like the IMF, World Bank, or WEF (World Economic Forum) always talk about India being one of the biggest consumer markets, or the fastest growing consumer market etc. How much truth is there in such claims? In this brief write up let us explore these claims.
Recently, during their annual meeting in Davos, WEF (World Economic Forum) President Mr. Borge Brende said,
I still think this year it [India] will be the fastest growing of the large economies. And we have numbers now showing that India can maybe make up for 20 percent of all the global growth.
Or UBS is saying,
“India’s household consumption nearly doubled in the past decade to $2.4 trillion in 2024, recording a 7.9 percent CAGR, stronger than China, the US, and Germany. Our estimates indicate India’s consumer market is on track to become the world’s third largest in 2026, well before its GDP does by 2028,” according to the UBS report.
And this is European Commission President Ursula von der Leyen,
Right after Davos, I will travel to India. There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals.
Europe wants to do business with the growth centers of today and the economic powerhouses of this century.
Can India make up for 20 percent of all global growth? Is India a global growth center and an economic powerhouse of this century? How big is the Indian consumer market? Let us see.
First, economic growth is defined as a production of economic goods (manufacturing, agriculture, and services combined) because that production will determine the level of future consumption. Without production there is no consumption. Mainstream Keynesian methods of calculating economic growth which include consumption as part of GDP is totally senseless, and wrong.
What is the percentage of global economic production that India produces? India produces just under 3% of the world’s manufactured goods. If you include services and agriculture, India’s share of total output is closer to around 3.5–4% of the global economy. Compared to that, China’s share of global production is around 28%. USA and Japan’s share are 18% and 10% respectively. Germany and South Korea are ahead of India too. Even with very optimistic assumptions, India’s share of global output will be close to 20% only in year 2070. With historic trends in mind, it will take 200 years more for India to reach 20% of global output! India is a nothingburger when it comes to global production.
Secondly, what about consumption? When we look at global consumer markets, India looks a lightweight against others. Table 1 below gives a list of top ten global consumer markets by total consumer spending.
| Rank | Country | Consumer spending (approx trillion dollars) |
| 1 | 🇺🇸 USA | ~$19T |
| 2 | 🇨🇳 China | ~$7T |
| 3 | 🇯🇵 Japan | ~$2.5T |
| 4 | 🇩🇪 Germany | ~$2.3T |
| 5 | 🇮🇳 India | ~$2.2T |
| 6 | 🇬🇧 UK | ~$2.1T |
| 7 | 🇫🇷 France | ~$1.6T |
| 8 | 🇧🇷 Brazil | ~$1.4T |
| 9 | 🇮🇹 Italy | ~$1.3T |
| 10 | 🇲🇽 Mexico | ~$1.3T |
Even by total consumer spending India is in 5th place, far behind its neighbor China. Chinese consumer market is 3 times bigger than India’s. USA is by far the biggest global consumer market.
But such aggregate data comparison hides the ground realities. We also need to know the disaggregated picture of Indian consumer demand. What kind of demand is coming out of India? To do that table 2 presents per capita consumer demand data.
| Rank | Country | Per-capita consumption |
| 1 | 🇺🇸 USA | Extremely high |
| 2 | 🇩🇪 Germany | Very high |
| 3 | 🇫🇷 France | Very high |
| 4 | 🇬🇧 UK | Very high |
| 5 | 🇯🇵 Japan | High |
| 6 | 🇮🇹 Italy | High |
| 7 | 🇧🇷 Brazil | Medium |
| 8 | 🇲🇽 Mexico | Medium |
| 9 | 🇨🇳 China | Medium-low |
| 10 | 🇮🇳 India | Low |
This table informs us how powerful the consumers of these countries are. As we can see, Indian consumers are very weak compared to other countries with which pundits do not ever tire of making comparisons to India. India’s market size comes from the size of its population, and not from their purchasing power. Purchasing power of Indian consumers is very weak. Indian consumers are poor and do not have any discretionary spending power. Their demand is for the most basic necessities of life. Most are barely surviving at the subsistence level. Any talk about India being a future global consumer market is a figment of imagination of globalist elites who are desperately looking for alternatives to the US whom they despise, especially under President Trump. These global elites have little understanding of the ground realities of India.
Conclusion
As the data (even when imperfect) reveals, India is neither a global growth center nor any global economic powerhouse of this century. It isn’t a big significant consumer market compared to other global powerhouses like the USA or China. The reality is that since 2014, when Modi administration came to power, its manufacturing output is either stagnant or has declined as a percentage of GDP. Most of its supposed growth is coming from services like IT and financial sectors. This shows how priorities are upside down in India. In a country where millions go hungry, agriculture and manufacturing should be the leading contributors in GDP, and not services. Instead of making these senseless comparisons with first world developed countries or even with neighboring China Indians should focus on bettering their lives. There is no shame in accepting your condition, and try to improve it. The false pretense of greatness or world leadership is lethal.
