Discretionary Consumption In India To Reach USD 2 Trillion by 2030: Barclays

New Delhi, Jan 25 (KNN) India is poised to become a global economic powerhouse, with consumers expected to be the primary drivers of growth, according to a report by Barclays.

The report forecasts that aggregate discretionary consumption in India will triple to USD 2 trillion by 2030.

“Consumption already forms a bigger part of the Indian economy (58 per cent) than in most large consumer-led economies. This, coupled with an expected surge in India's population, suggests the country's consumption is primed for world-beating growth,” Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays, said in a report released Wednesday.

The study anticipates that India's private consumption expenditure (PCE) will reach China's 2022 nominal consumption by FY34, even before GDP parity. This growth is attributed to an expanding population in the 25-45 age group.

Barclays notes the potential for faster changes in consumption preferences if income grows at an accelerated pace.

However, the report highlights associated risks that could impact macro stability, suggesting a need for balanced measures such as increased exports, faster domestic manufacturing capabilities, and improved domestic financing.

The study suggests that higher exports can offset import growth, contributing to macro stability. Barclays emphasises the importance of enhancing domestic financing capabilities to support the expansion of manufacturing.

The report concludes by discussing the conditions required for India to achieve sustained growth, with the Indian economy projected to grow at 7.3 per cent in FY24, according to the government's first advance estimate.

(KNN Bureau)