India Per Capita Income to Cross dollar 5,000 by 2031 Franklin Templeton

• India’s per capita income is projected to surpass $5,000 by 2031 , according to Franklin Templeton’s report “Beyond Necessities: India’s Affluence-Driven Growth.” The study indicates that rising incomes will transform India into a major consumption-led economy , with increasing demand for premium and aspirational products.

Income Growth and Changing Consumption Patterns

• India’s per capita income has reached $2,600 in FY2025 and is expected to double in the next six years. This marks the country’s entry into an “affluence trigger zone,” where spending shifts from essentials to discretionary items. As more households move into higher income categories, lifestyle and luxury consumption are set to expand sharply.

Expanding Affluent Class

• The share of upper-middle and rich households in India is expected to rise from 11.1% in 2010 to 24% by 2035 , meaning one in four households will have significant purchasing power. Strong equity markets, real estate growth, and gold investments are fueling this wealth creation, leading to higher consumer confidence and spending.

Premiumisation Trend

• Non-essential consumption is projected to increase from 36% to 43% by FY2030 , reflecting a clear shift toward quality and brand preference. Premium goods are growing much faster than mass-market items—for instance, premium detergents are expanding at 26% CAGR versus 7% for regular products, while green tea sales are growing at 25% compared to 10% for standard tea.

Economic Impact

• Consumption already accounts for nearly 60% of India’s GDP , and the top 20% of households contribute about 85% of total savings , reinforcing their influence on spending trends. The report concludes that rising affluence, urbanisation, and digital access will drive India’s next phase of growth, transitioning the economy from necessity-led to aspiration-led demand .

Exam Key Facts:

• Per capita income to reach $5,242 by 2031

• Affluent households to rise to 24% by 2035

• Non-essential consumption to reach 43% by FY2030

• Premium goods growing up to 3x faster than mass-market items