India likely to have highest per-capita income growth, says report

Study pegs growth at 5.4% during 2024-33

India is likely to have the highest per-capita income growth in the world at 5.4 per cent per annum during 2024-33, allowing it and other emerging economies to drive global consumption of agricultural and fisheries products in the next decade, according to a recent report by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO).

The Agricultural Outlook 2024-33 report, released earlier this month, said India and Southeast Asian countries are expected to increase their influence in driving global food and agricultural consumption, owing to their growing urban populations, increased production through technological advances, and rising income levels, overtaking the waning Chinese influence and leading to changes in global agricultural patterns.

 

“While China contributed 28 per cent of global consumption growth in the previous decade, its share of additional demand over the coming decade is expected to fall to 11 per cent, attributed to a stabilisation of nutrition patterns, slower income growth, and a declining population. Conversely, India and Southeast Asian countries are expected to account for 31 per cent of global consumption growth by 2033,” the report highlighted.

Furthermore, South and Southeast Asia are projected to account for about 40 per cent of additional global consumption during the next decade, with half of this share attributed to India.

“India’s trend GDP growth is currently at 6.5-7 per cent. The population growth has been around 1 per cent. This means that the per-capita income growth on a trend basis should be around 5.5 per cent, which is closer to the projected levels by the OECD-FAO report,” said Paras Jasrai, an economist at India Ratings & Research.

The report said OECD nations have seen the most drastic fall in the world market consumption for dairy and vegetable oil, and countries like India and China respectively have captured this market share.

On the production side too, OECD global production shares across cereals, milk, and sugar are declining relative to other regions, and especially India.

“The most notable change occurred in global milk markets, with the OECD share dropping from 51 per cent to 41 per cent. India accounted for nearly all of this shift, increasing its share from 14 per cent to 23 per cent,” the report stated.

Dairy is expected to be the fastest-growing among the livestock sectors, with India and Pakistan leading in absolute milk production growth based on yield improvements and a rise in milking animals, the report said.

The report said global wheat consumption is expected to be 11 per cent higher in 2033 compared to the consumption in 2021-2023, with India, Pakistan, Egypt, and China poised to account for more than half of this increase. Meanwhile, India is projected to maintain its high import growth of vegetable oil to satisfy its domestic demand, with a per-capita consumption growth of 1 per cent per annum by 2033.

India is also foreseen to account for 19 per cent of the world’s total sugar output in 2033. “In India, despite improving crop yields and extraction rates, the increase is projected to be lower given the diversion of sugarcane to ethanol production, and the growth in sugarcane production is projected to stem mostly from higher crop yields, as acreage is not expected to expand given competition from other (agricultural) crops,” the report argued.

The report said India’s dominance in the production of cereals and sugar is likely to continue unabated in the region, albeit India’s share in sugar might fall as Thailand’s share is expected to rise due to productivity-based yield gains.