NEW DELHI, Nov 11: India is set to become the world’s third-largest consumer market in 2026 and third-largest economy by 2028 after the US and China, as it could maintain potential real GDP growth of 6.5pc year-on-year (YoY) between FY28-30, said analysts at UBS in a recent report.
The report mentioned that the global growth could slow marginally to 3.1pc 2026 from 3.2pc in 2025, before rising to 3.3% in 2028.
While retail flow still supports the market, UBS said, selling pressure from foreign investors and (increasingly) IPO/capital-raising activity by corporates must be watched.
“India lacks any direct artificial intelligence (AI) beneficiary stocks, unlike other larger markets. Among sectors, we prefer banks and consumer staples in the Indian context,” their analysts wrote.
UBS has assumed that US-India trade deal will materialise, and the additional 25pc penalty will be withdrawn, reciprocal tariff on India is lowered to around 15%, which is closer to the levels of other Asian countries, by December 2025-end.
India’s real GDP growth, UBS said, is likely to stabilise at 6.4pc YoY in FY27 (10bps below consensus) and 6.5% in FY28, on supportive policy and strong domestic demand, making it the fastest growing economy in the Asia Pacific (APAC) region in 2027, followed by Philippines (GDP growth at 6.1%) and Indonesia at 5.1%.
“India’s household consumption nearly doubled in the past decade to USD2.4 trillion in 2024, recording a 7.9pc CAGR, stronger than China, the US and Germany. Our estimates indicate India’s consumer market is on track to become the world’s third largest in 2026, well before its GDP does by 2028.”
(UNI)
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