India Set to Outpace Major Economies as Global Consumption Leader by 2034

India is poised to become the global consumption leader, driven by rapid consumer base growth. Household expansion from nuclear family trends surpasses population growth, propelling consumption. Projections include a ten-fold increase in savings and significant fiscal impacts from tax cuts, all contributing to India's economic rise.

India is on track to outpace global economic giants and become the world's consumption capital by 2034, according to a new report by Angel One, Iconic asset. Currently, consumption makes up 56% of India's GDP, marking it as the fastest-expanding segment of the national economy.

Nuclear family trends have resulted in household growth outstripping population increases, a phenomenon that fuels rising consumption levels. The country is also expected to spearhead growth in the global workforce. Over the next quarter-century, India's savings are projected to increase ten-fold, from USD 12 trillion to USD 103 trillion, as per the report, opening untapped avenues for additional consumption.

Another driving factor is the recent tax reductions in the Union budget, anticipated to release Rs 1 lakh crore, paving the way for an extra Rs 3.3 lakh crore in consumption and potentially boosting India's GDP by 1%. Historical data from the US and China suggest that discretionary spending often precedes non-discretionary expenditures during economic upswings, a trend India is expected to follow.

The report highlights that with a rise in per capita income, India could see a tenfold surge in consumption, especially in sectors like consumer electronics, apparel, and the experience economy. Kirana stores still dominate 92% of retail trade, providing ample room for modern retail expansion.

Significantly, India boasts more Gen Z individuals than the entire population of the US. By 2035, Gen Z will account for every second rupee spent, strengthening the narrative of India's consumption growth. (ANI)

(With inputs from agencies.)