India’s growing population and rising consumption present investment opportunities

INDIA is expected to become the world’s most populous country this week. According to the United Nations, India’s population will hit 1,425,775,850 by Apr 15, surpassing that of China, the current frontrunner. The country’s population is then forecasted to reach 1.5 billion by 2030, and peak at 1.7 billion around 2064.

This in turn is expected to fuel a surge in consumption, the driving force behind the country’s rapidly expanding economy. India grew the second-fastest globally in 2022, and is set to take the lead this and next year, with its gross domestic product projected to increase by 6.1 per cent in 2023 and 6.8 per cent in 2024. The country’s consumer sector, which already accounts for around 60 per cent of its economy, is projected to expand at an even faster pace, with a compound annual growth rate of 9 to 10 per cent over the coming decade, to hit US$2 trillion in 2032. Notwithstanding near-term headwinds such as inflation and the depreciation of the rupee, India will also be the world’s third-largest economy by then, behind only the US and China.

Significantly, the composition of India’s consumption basket is expected to evolve. As education and income levels continue to rise amid the further development of the country, spending on higher-value goods and services will increase.