India set to treble wealth in 10 years
dubai — India, the world’s fastest growing major economy, is set to record a three-fold growth in wealth in 10 years to emerge as the world’s fourth largest wealth market by 2027, according to a global market research group.
A study by New World Wealth (NWW) forecasts total private wealth in the third largest Asian economy would reach $25 trillion by 2027 from $8.2 trillion in 2017.
“India’s total wealth will overtake the UK and Germany. The number of HNWIs [high net worth individuals] living in India is expected to reach just over 950,000 by 2027, while the number of billionaires is expected to reach around 350 by 2027,” the Johannesburg-based NWW said in its forecast.
The study listed among other reasons “highly competitive wages when compared to worldwide peers”. Strong economic growth prospects, large number of entrepreneurs, good educational system, strong ownership rights, ongoing crackdown on corruption leading to improved ease of doing business in country, are among other reasons behind the wealth growth.
“We expect safety levels in the country to improve significantly going forward, which should encourage wealth growth,” said the report.
The International Monetary Fund ranks India as the world’s seventh largest economy with a GDP of $2.85 trillion. According to a report by PwC, India will be the world’s second largest economy after China by 2050. China will have an economy of nearly $58.5 trillion, while India’s will be around $44.1 trillion and America’s will total $34.1 trillion, the report said.
Total wealth held by people living in India rose strongly over the past 10 years, from $3.2 trillion in 2007 to $8.2 trillion in 2017 while the total private wealth held worldwide amounts to $215 trillion.
India’s HNWI volumes also increased substantially, from 124,000 in 2007 to around 330,000 in 2017. This made India one of the top-performing wealth markets in the world, said the NWW report.
Total wealth held by all the individuals living in India amounts to $8.2 trillion as of December 2017. This includes the wealth of all people living in the country, including: middle class, low-income and HNWIs all together. Around $3.9 trillion (or 48 per cent) of this total is held by HNWIs, said the NWW report.
In 2017, total wealth held in India increased, from approximately $6.6 trillion in 2016 to $8.2 trillion. HNWI numbers grew by a similar percentage. This growth was driven by strong local stock market gains in dollar terms.
Growth was positively impacted by strong growth in the local technology and healthcare sectors. There was also strong growth in the local real estate, financial services and the professional services sectors, solid economic growth and increased levels of entrepreneurship.
However, a significant depreciation of the rupee against the dollar, from approximately 39 per dollar at the end of 2007 to 64 per dollar at the end of 2017, negatively impacted growth.
The migration of around 38,000 HNWIs out of the country between 2007 and 2017 also had a negative impact, said the report. “Most of these individuals went to USA, the UAE, the UK, Canada, Australia and New Zealand. Some also took advantage of residency programmes in Portugal, Cyprus, Malta and the Caribbean. Possible reasons for leaving included: Business opportunities and work transfers,” said the report.
“In our view, these outflows are not particularly concerning as India is still producing far more new millionaires than it is losing. Also, once the standard of living in India improves, we expect several wealthy people to move back.”
Currently, India is the sixth largest wealth market in the world, in terms of total wealth held, after USA, China, Japan, Germany and the UK. The average Indian individual has net assets of approximately $6,600. There are around 330,000 HNWIs living in India, each with net assets of $1 million or more, and around 20,700 multi-millionaires living in India, each with net assets of $10 million or more. The country has 1,064 centi-millionaires, each with net assets of $100 million or more and boasts 119 billionaires, each with net assets of $1 billion or more. “In particular, India has a large number of billionaires — only two counties worldwide have more billionaires than India: US and China,” said the report.