Unlocking India’s Wealth: 2025 Per Capita Income Insights

India’s growing income levels are influencing consumer preferences and driving a broader move toward discretionary spending. Current estimates indicate that India’s per capita income is around US$2,600 in FY 2024-25 and could approach US$5,000 by 2030; a level typically associated with increased demand for higher-quality and lifestyle-oriented products.

For businesses, this transition signals expanding prospects in premium product categories, branded offerings, and experience-driven services, as the market evolves into a more confident and aspiration-focused consumer economy.

India is experiencing steady income growth accompanied by evolving household consumption patterns. Market report estimates indicate that India’s per capita income has reached approximately US$2,600 in FY 2024-25 and may rise toward US$5,000 by 2030, a level often associated with a gradual shift from essential to discretionary spending.

According to a report from the Franklin Templeton titled, “Beyond Necessities: India’s Affluence-Driven Growth”, the share of upper-middle-income and affluent households in the country is projected to increase from 11.1 percent in 2010 to nearly 24 percent by 2035.

The report states that one in four Indian households is expected to possess meaningful discretionary spending power within the next decade. This shift is being reinforced by rising equity markets and increased household investment in gold, all of which are contributing to a stronger wealth effect and higher consumer confidence.

Key insights from Franklin Templeton’s report

Franklin Templeton’s latest report, issued on October 20, 2025, highlights a major shift in the country’s economic landscape. India is projected to become the world’s third-largest economy by 2030, overtaking Germany, as rising incomes are influencing consumer priorities and spending patterns.

Source: “Beyond Necessities: India’s Affluence-Driven Growth”- a Franklin Templeton report

*The GDP estimates are based on IMF and BofA Global Research estimates (May–August 2025 data).

Shift from necessity to aspiration-led consumption

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As income levels rise, spending patterns are evolving in India. Franklin Templeton’s report notes that amongst the Indian population, discretionary expenditure, spending beyond basic needs, has grown steadily:

• ~15 percent of household spending in the 1950’s
• ~36 percent of household spendings as of 2025
• Projected to exceed 43 percent of household spending by 2030

In the fast-moving consumer goods (FMCG) category, premium and branded categories are expanding faster than mass-market alternatives.

Source: Euromonitor; CLSA; CY 2014–2024 data, October 2025

The consumption choice illustrates the local population’s increasing preference toward quality, identity, wellness, and brand experience; a further indication of a maturing, confidence-driven consumer economy.

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Rising consumption gains and the broadening consumer base

The increase in India’s per capita income is progressively reflected in rural spending patterns. Economic expansion, better infrastructure, and wider digital connectivity have improved rural participation in the consumer economy, leading to better living standards outside urban centers.

Between 2012 and 2024, rural household expenditure grew at an average rate of 9.2 percent per year, slightly faster than urban growth of 8.5 percent. This has helped narrow the rural-urban consumption gap, from urban households spending 84 percent more than rural households in 2012 to about 70 percent in 2024. Monthly per capita expenditure in rural areas rose from INR 1,429 (US$16.13) in 2012 to INR 3,774 (US$42.60) in 2023, marking a shift from basic necessities to more discretionary and lifestyle-related purchases.

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Notably, the share of food in rural budgets declined from about 60 percent to 47 percent, and in urban households from 48 percent to 40 percent, indicating broader spending on education, healthcare, consumer durables, and services. This trend aligns closely with rising per capita income nationwide, where higher earnings and declining population growth rates are enabling faster income gains per person.

Long-term trends in India’s per capita income

Per capita income provides a basic measure of economic well-being of a country. In India’s case, where the population is both large and diverse, it serves as a useful benchmark for evaluating the pace of growth relative to demographic expansion.

Data from the Ministry of Statistics and Program Implementation (MoSPI) shows that India’s per capita Net National Income (NNI) has consistently risen over the past decade, except during the COVID-19 pandemic.

Source: National Accounts Statistics 2025 report, MoSPI

When adjusted for inflation (constant 2011-12 prices), real per capita income increased from INR 83,003 (US$936.98) in FY 2016-17 to INR 108,786 (US$1,228) in FY 2023-24. This indicates an actual improvement in purchasing power, although the recovery was uneven.

Population dynamics and income distribution

India’s population rose from approximately 1.3 billion in 2016-17 to around 1.4 billion in 2023-24. As per the United Nations Population Fund, India’s estimated population for 2025 is around 1.46 billion.

While the NSA 2025 report highlights that increase in economic output has outpaced population growth, gains are not evenly distributed.

• Urban centers and sectors such as technology, finance, pharmaceuticals, and formal manufacturing are experiencing rapid wage and income growth.
• Rural regions, informal employment, and agriculture-linked workers continue to see relatively slower income gains.

Therefore, while average per capita income is rising, differences in consumption capacity persist across income groups and regions. Policymakers and businesses must interpret per capita figures alongside these structural disparities.

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Consumption and purchasing power: PFCE insights

Per capita Private Final Consumption Expenditure (PFCE) is another key indicator that reflects how much individuals actually spend. This helps assess living standards more accurately than income figures alone. India’s per capita PFCE increased from INR 70,258 (US$793.11) in 2016-17 to INR 129,967 (US$1,467) in 2023-24 at current prices, according to the NSA 2025 report.

At constant prices, PFCE reveals a more modest increase, indicating that rising prices have absorbed part of the gains in income.

This suggests that while incomes have increased, inflation has constrained real purchasing power, especially for essential categories such as food, fuel, and housing.

Opportunities and growth projection

PFCE accounts for approximately 60 percent of India’s GDP, and rising income levels and expanding affluent households will play a decisive role in shaping future growth. Businesses across FMCG, retail, financial services, healthcare, electronics, hospitality, and lifestyle sectors are expected to come across new opportunities as premiumization accelerates.

However, sustaining this shift requires attention to:

• Productivity and skills enhancement
• Employment generation across high-value sectors
• Rural income diversification
• Managing inflation and ensuring financial inclusion

Other conomic experts in India hold similar belief that the country’s per capita income is expected to double by the end of 2030. On October 3, 2025, India’s former bureaucrat N.K. Singh noted that slower population growth and higher nominal income expansion have accelerated per capita income growth, from around 1 percent annually in earlier decades (pre-1980) to nearly 6 percent annually in 2025.

Singh highlighted that the latest goods and services tax (GST) reforms will be central to this trajectory, improving ease of doing business, stimulating consumption, and reinforcing investor confidence.

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To sustain and deepen income gains, he emphasized the need to enhance productivity, boost trade diversification, and increase net foreign direct investments (FDI) inflows from the current 1 percent of GDP to at least 3 percent.

Overall, the outlook suggests that India’s per capita income growth will increasingly depend on structural reforms and productivity-led expansion, alongside continued macroeconomic stability.

Conclusion

India’s rising per capita income reflects more than just economic expansion. It signals a transition toward an aspiration-driven consumer economy. As more households gain discretionary spending capacity, demand is expected to shift decisively toward premium goods, services, and lifestyle-based consumption. At the same time, ensuring that income growth is broad-based and equitable will be essential for translating economic gains into improved living standards for all.

(US$1 = INR 88.58)

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