After Japan, India poised to overtake US to become 2nd largest middle-class market in less than 4 years

By: | Updated: August 23, 2018 1:29 PM

The Indian middle-class market is growing fast and by 2022, India could overtake the US to become the second-largest in the world, Brookings said in a report.

India could overtake the United States to become the second largest middle-class market by 2022After Japan, India poised to overtake US to become 2nd largest middle-class market in less than 4 years (Image: Reuters)

India could overtake the United States to become the second largest middle-class market by 2022, a report has said. The Indian middle-class market is growing fast and by 2022, India could overtake the US to become the second-largest in the world, Brookings said in a report titled ‘The Unprecedented Expansion of the Global Middle Class’, adding that India probably overtook Japan as a middle-class market in 2016.

“Almost 90%—of the next billion entrants into the global middle class will be in Asia: 380 million Indians, 350 million Chinese, and 210 million other Asians,” the report said. The rapid expansion in the middle-class is a result of high contribution to the world population.

Lower fertility rate but…

With developing countries like India, Indonesia, Nigeria etc becoming middle-class, there are chances of successful reduction in fertility rate, which eventually will help in reducing the population growth in coming years. While India will become a middle-class market, lack of social assistance programme is a problem.

India is now richer than Germany in the late 1880s when it introduced social insurance for all workers. Indonesia is richer than the US was in 1935, when the Social Security Act was passed. And China is richer than Britain was in 1948, when the National Health Service was introduced.

“None of these developing countries has anywhere near as well developed a package of social assistance programs as today’s advanced countries had at a similar stage of development,” the research said quoting International Institute for Applied Systems Analysis in Vienna.

Higher carbon footprint

As emerging markets like India is becoming middle-class faster, carbon footprints are also expected to increase. Growing middle-class spending will undoubtedly have an effect on carbon emissions, but the size depends on government policies, the research said, adding that some of it could be mitigated due to urbanisation.

With expansion in the middle-class/urban population, people would be able to afford efficient technology than being used by the rural population. If cities are properly planned with energy-efficient buildings and mass transport, and
if aggressive campaigns are introduced to provide universal secondary education to girls, then the carbon footprint of global middle-class expansion can be reduced considerably,” the report added.

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