Tracking the growth of India's Middle Class

Abstract

Over the next two decades, the country's middle class will grow from about 5 percent of the population to more than 40 percent and create the world's fifth-largest consumer market. India's rapid economic growth has set the stage for fundamental change among the country's consumers. The same energy that has lifted hundreds of millions of Indians out of desperate poverty is creating a massive middle class centered in the cities. A new study by the McKinsey Global Institute (MGI) suggests that if India continues its recent growth, average household incomes will triple over the next two decades and it will become the world's 5th-largest consumer economy by 2025, up from 12th now. 1 Along the way, spending patterns will shift significantly as discretionary purchases capture a majority of consumer spending. India's potential should make it a high priority for most consumer goods businesses, but to succeed in this complex market they must overcome major challenges. Private consumption has already played a much larger role in India's growth than it has in that of other developing countries. In 2005 private spending reached about 17 trillion Indian rupees 2 ($372 billion), accounting for more than 60 percent of India's GDP, so in this respect the country is closer to developed economies such as Japan and the United States than are China and other fast-growing emerging markets in Asia (Exhibit 1). Our study 1 The full report, The 'Bird of Gold': The Rise of India's Consumer Market, is available free of charge online

Full text

Tracking the growth of India’s middle class 51
Tracking the growth of
India’s middle class
Over the next two decades, the country’s middle class will grow from
about 5 percent of the population to more than 40 percent and create the
world’s fifth-largest consumer market.
Eric D. Beinhocker, Diana Farrell,
and Adil S. Zainulbhai
India’s rapid economic growth has set the stage for fundamental change
among the country’s consumers. The same energy that has lifted hundreds
of millions of Indians out of desperate poverty is creating a massive middle
class centered in the cities. A new study by the McKinsey Global Institute
(MGI) suggests that if India continues its recent growth, average household
incomes will triple over the next two decades and it will become the world’s
5th-largest consumer economy by 2025, up from 12th now.1 Along the way,
spending patterns will shift signicantly as discretionary purchases capture
a majority of consumer spending. India’s potential should make it a
high priority for most consumer goods businesses, but to succeed in this
complex market they must overcome major challenges.
Private consumption has already played a much larger role in India’s growth
than it has in that of other developing countries. In 2005 private spending
reached about 17 trillion Indian rupees2 ($372 billion), accounting for more
than 60 percent of India’s GDP, so in this respect the country is closer
to developed economies such as Japan and the United States than are China
and other fast-growing emerging markets in Asia (Exhibit 1). Our study
1
The fu ll report, The ‘Bi rd of Gold’: The Rise of In dia’s Consume r Market, is ava ilable f ree of charge online
at www.mckinsey.com/mgi.
2
We have converted Indian rupees to US dollars at the base year 2 000 exchange rate of 45.7 rupees to the dolla r.
Purcha sing-power-parity gures were converted at the rate of 8.5 rupees to the dol lar.
Dinesh Khanna

The McKinsey Quarterly 2007 Number 3
52
shows that aggregate consumer
spending could more than
quadruple in coming years, reaching
70 trillion rupees by 2025. Higher
private incomes and, to a lesser
extent, population growth will
encourage this rise in consumption.
Changes in savings behavior will
play only a minor role.
With such growth on the horizon,
it is unclear which companies
will win in most product categories.
Opportunities will blossom as
millions of rst-time buyers step
up to cash registers and as the bulk
of consumer spending moves
from scattered, hard-to-reach rural
areas to more concentrated,
accessible urban markets. Indian
consumer spending will shift
substantially from the informal
economy, with its individual
traders, to the more efcient formal economy of organized businesses. That
transition will lower prices and further boost demand.
But neither incumbents nor attackers will have an easy time. Bureaucratic
hurdles and well-recognized infrastructure shortcomings will frustrate
many strategies. In addition, while aggregate spending will rise tremen-
dously, it will be spread across hundreds of millions of households, many
with very modest incomes (by the standards of developed countries) and
high sensitivity to price and value. Finally, in many consumer markets
both Indian and multinational companies already compete intensely for
customers. While the opportunities will be enormous, the challenges
will force companies to be more dynamic by adapting their products, ser-
vices, and business models to the rapidly changing needs and incomes
of Indian consumers.
We examined the way India’s consumer market will likely develop under a
set of reasonable economic assumptions (see sidebar, “About the research”).
In particular, our model assumes that real compound annual growth will
be 7.3 percent over the next two decades and that economic-reform efforts
will continue. If these conditions are met, the life of the average Indian
will change vastly by 2025.
Article at a glance
Over the next 20 years, India will likely grow to become
the world’s fifth-largest consumer economy.
A study by the McKinsey Global Institute suggests
that if India can achieve 7.3 percent annual
growth—a reasonable assumption if economic
reforms continue—consumer spending will quadruple,
from about 17 trillion Indian rupees ($372 billion) in
2005 to 70 trillion rupees in 2025. The dramatic growth
in India’s middle class, from 50 million to 583 million
people, will power this surge.
Spending patterns will shift dramatically as
expenditures grow rapidly on discretionary items
ranging from personal products to consumer
electronics. Incumbents will have to fight to retain
their market dominance, while attackers could
find lucrative ways to exploit the evolving tastes
of India’s massive new middle class.
Related articles
on mckinseyquarterly.com
“China and India: The race to growth”
“The new Chinese consumer”
“Winning the Indian consumer”

Tracking the growth of India’s middle class 53
To assess the likely evolution of India’s consumer
market, MGI assembled a proprietar y data-
base with 20 years of data linking macroeconomic
and demographic variables to the incomes and
consumption behavior of Indian households. We
made extensive use of our exclusive access to
the Market Information Survey of Households (MISH)
database (covering more than 300,000 house-
holds), created from income surveys conducted by
India’s National Council of Applied Economic
Research (NCAER), as well as the Indian govern-
ment’s National Sample Sur vey (NSS) house-
hold consumption database, created from consumer
expenditure surveys across thousands of villages
and urban blocks. We integrated the MISH and NSS
data, along with data from a variety of other
sources, and then constructed an econometric model
to forecast India’s household income and spend-
ing from 2006 to 2025.
Our model is driven by a macroeconomic base
case that shows overall real compound annual
economic growth of 7.3 percent and real per
capita growth of 5.9 percent to 2025. This base
case is in turn built on a more detailed analy-
sis of future productivity growth, sectoral grow th
rates, savings and investment, demographics,
education levels, and other factors.
We have not based our projections for India on
any profound shift in economic policy. Rather,
we assume that recent rapid growth rates will cool
down to a more sustainable (but still high) level,
that the country will remain on a long-term path
of economic reform, and that India will make
necessary investments in its infrastructure and
human capital. Faster reform, investment, and
modernization would hasten the results we describe;
a slower pace would delay them or put India’s
future progress at risk.
About the research
Jammu
and Kashmir
(administered by India)
Himachal Pradesh
Punjab
Chandigarh
Rajasthan
Haryana
Uttar
Pradesh
Uttarakhand
Sikkim
Arunachal
Pradesh
Nagaland
Assam
Bihar
Jharkhand
Chhattisgarh
West
Bengal
Meghalaya Manipur
Mizoram
Tripura
Orissa
Madhya Pradesh
Maharashtra
Dadra and
Nagar Haveli
Daman
and Diu
Gujarat
Puducherry
1
Andhra
Pradesh
Goa Karnataka
Tamil Nadu
Kerala
Puducherry
1
Puducherry
1
Puducherry
1
1Puducherry (formerly Pondicherry), a union territory, comprises 4 noncontiguous enclaves
of former French India.
ARABIAN SEA
Gulf of Mannar
INDIAN OCEAN
BAY OF BENGAL
Sri Lanka
Afghanistan
China
Myanmar
(Burma)
Bangladesh
Nepal
Pakistan
Bhutan
Ahmedabad
Pune
Kolkata
Hyderabad
Bangalore
Chennai
Delhi
Mumbai
Lakshadweep Andaman and
Nicobar Islands
Capital Large urban areas
Line of Control Area held by China,
claimed by India
Area ceded to China
by Pakistan, claimed by India
Kashmir (administered
by Pakistan)
WebEx 2007
MGI India consumers
Map

The McKinsey Quarterly 2007 Number 3
54
A market rising from poverty
India’s economic reforms, begun in 1991, have substantially improved the
country’s well-being, and our analysis shows that further improvements are
to come. In 1985 93 percent of the population lived on a household income
of less than 90,000 rupees a year, or about a dollar per person per day; by 2005
that proportion had been cut nearly in half, to 54 percent. By our estimate,
431 million fewer Indians live in extreme poverty today than would have if
poverty had remained stuck at the 1985 level. We project that if India can
achieve 7.3 percent annual growth over the next 20 years, 465 million more
people will be spared a life of extreme deprivation (Exhibit 2).
Contrary to popular perceptions, rural India has beneted from this growth:
extreme rural poverty has declined from 94 percent in 1985 to 61 per-
cent in 2005, and we project that it will drop to 26 percent by 2025. While
the progress has been substantial—even historic—signicant challenges
remain. First, there are large regional disparities in growth and in the reduc-
tion of poverty: India’s southern and western states prosper, while the
northern and eastern states (with the exceptions of the capital region, Haryana,
Himachal Pradesh, and Punjab) lag behind. Second, while India has been
slowly urbanizing over the past two decades, it remains the least urbanized of
the emerging Asian economies. Today only 29 percent of Indians live in
cities, compared with 40 percent of the Chinese and 48 percent of Indonesians,
and we project that the level of urbanization will increase to only 37 per-
cent by 2025.3 Finally, while more Indians are completing secondary and higher
3
Methods of measurement differ across countries and may understate India’s urbanization rate, but the general
point remains valid.
% of GDP, 2005
Private
consumption
Government
consumption
Investment
Net trade
100% ($ billion) =
WebEx 2007
MGI India consumers
Exhibit 1 of 5
Glance: India’s private consumption as a share of GDP is closer to that of Japan and the United States
than it is to China’s.
China
44
39
2,216
14
Japan1
23
57
4,553
18
India
28
62
801
12
United
States
20
70
12,456
16
1–6
3–2
Figures do not sum to %, because of rounding.
Source: Global Insight; McKinsey Global Institute analysis
Private consumption: A starring role
 

Tracking the growth of India’s middle class 55
education, the educational system remains severely strained and the quality
of and opportunities for schooling vary widely.
In rural areas life may become less desperate thanks to continued growth and
to government investment in infrastructure and development. But it will likely
remain a struggle, particularly for subsistence farmers in the north and east
and for others with little education. For India’s urbanites, especially educated
ones, the future looks promising. Many of these households will make the
jump not only out of poverty but also into the new and aspiring middle class.
The birth of a new middle class
The growth that has pulled millions of people out of poverty is also building
a huge middle class that will be concentrated in India’s urban areas. While
urbanization isn’t proceeding as quickly as it is in other Asian economies, rapid
population growth means that in absolute terms the country’s urban
population will expand signicantly, from 318 million today to 523 million
in 2025.
Urban growth will bring several important consequences. First, it will put
tremendous pressure on the urban infrastructure, which is already heavily
overburdened. (Our projections assume that infrastructure investments will
at least keep pace with urban growth and that problems with transporta-
tion and utilities won’t worsen to the point of hampering growth.) Also, in
Globals
Strivers
Middle class
Seekers
Aspirers
Deprived
100% (millions of
people) =
WebEx 2007
MGI India consumers
Exhibit 2 of 5
Glance: India will see further reduction in poverty and a growing middle class.
Exhibit title: Escaping poverty
1985
93
755
6
1995
80
928
18
200522015 2025
54
1,107
41
35
19
1,278
43
36
22
1,429
32
2
1
1 2
1
0
0
4
0
Share of population by annual income bracket,1%
Annual household income, thousand Indian
rupees3(real 2000)
Annual income: globals = >,ooo,ooo rupees; strivers = ,–,,; seekers = ,–,; aspirers = ,–,;
deprived = <,; gures may not sum to %, because of rounding.
Estimated.
. rupees =  in real  dollars or . rupees =  adjusted for purchasing power parity.
Source: McKinsey Global Institute analysis
0
0
Forecast
Escaping poverty
 
9
1

The McKinsey Quarterly 2007 Number 3
56
India—unlike China, where urban growth is spread across a large number of
cities—the economy will continue to be dominated by the megacities (Delhi
and Mumbai) plus the six next-largest urban agglomerations.4 Nevertheless,
a handful of smaller places, such as Chandigarh and Ludhiana, will have
per capita incomes rivaling those of the major cities and emerge as attractive
markets. The shift in spending power from the countryside to the cities
will place the bulk of India’s private consumption within easier reach of major
companies. Today 57 percent of private spending is spread across rural areas,
but by 2025 cities will command 62 percent of the country’s spending power.
Along with the shift from rural to urban consumption, India will witness the
rapid growth of its middle class—households with disposable incomes from
200,000 to 1,000,000 rupees a year.5 That class now comprises about 50 mil-
lion people, roughly 5 percent of the population. By 2025 a continuing rise
in personal incomes will spur a tenfold increase, enlarging the middle class to
about 583 million people, or 41 percent of the population. In 20 years
the shape of the income pyramid will have become almost unrecognizable
(Exhibit 3).
The Indian middle class has already begun to evolve, and by 2025 it will
dominate the cities. By then about three-quarters of India’s urbanites will be
part of the middle class, compared with just more than one-tenth today.
4
The nex t six are Kolkata, Chen nai, Hyderabad, Bangalore, A hmedabad, a nd Pune.
5
There is no stand ard denition of Ind ia’s middle class. In our study we adapted a met hodolog y, from India’s
National Council of Applied Economic Re search (NC AER), den ing the middle class as households with
a disposable income of 200,000 to 1,000,000 rupees ($4,380 to $21,890) a year in real 2 000 terms. That seems
quite low in the contex t of a developed country, but because the cost of living is lower in India, this range of
income buys a recognizably middle-class lifestyle. I n purch asing-power-parit y terms, the range is comparable
to an income of $23,530 to $117,650 in a developed cou ntry such as the United States.
WebEx 2007
MGI India consumers
Exhibit 3 of 5
Glance: A continuing rise in incomes nationally will spur a tenfold increase in the size of India’s
middle class.
Exhibit title: The expanding middle
Annual income: globals = >,ooo,ooo rupees; strivers = ,–,,; seekers = ,–,; aspirers =
,–,; deprived = <,; . rupees =  in real  dollars or . rupees =  adjusted for purchasing power
parity; . rupees =  in real  dollars or . rupees =  adjusted for purchasing power parity.
Source: McKinsey Global Institute analysis
Aggregate disposable income by annual income bracket, trillion Indian rupees1
Globals
Strivers
Seekers
Aspirers
Deprived
2.0
1.6
21.7
20.9
30.6
13.7
2.6
(1.2)
(2.4)
(10.9)
(91.3)
(101.1)
(3.3)
(5.5)
(55.1)
(106.0)
(74.1)
(9.5)
(33.1)
(94.9)
(93.1)
(49.9)
2015 2025
The expanding middle
 
3.1
11.4
5.4
2005
6.3
3.8
15.2
14.6
3.8
Middle class Number of households, millions(xx.x)

Tracking the growth of India’s middle class 57
The expansion will come in two phases, with the lower middle class peaking
around 2020, just as the growth of the upper middle class accelerates
(Exhibit 4). About 400 million Indian city dwellers—a group nearly 100 mil-
lion people larger than the current population of the United States—will
belong to households with a comfortable standard of living. For many com-
panies, the sheer scale of this new urban middle class will ensure that it
receives signicant attention.
What’s more, companies shouldn’t underestimate the market presented
by the country’s most afuent consumers: those earning more than
1,000,000 rupees a year—$21,890 in real 2000 dollar terms, or $117,650
in terms of purchasing power parity (PPP). They will remain a small
portion of society: about 2 percent of the population in 2025, up from
0.2 percent today. But in absolute numbers, by 2025 India’s wealthiest
citizens will total 24 million, more than the current population of Australia.
By that year too, India’s afuent class will be larger than China’s com-
parable segment, projected at about 19 million people.6 Afuent India’s share
of national private consumption will increase from 7 percent today to
20 percent in 2025, which helps to explain the recent rush into the Indian
market of luxury goods such as Louis Vuitton bags and Jimmy Choo shoes.
WebEx 2007
MGI India consumers
Exhibit 4 of 5
Glance: Income growth in India’s urban areas will lead to waves of dominant segments.
Exhibit title: Waves of change
1985
0
10
20
30
40
50
60
70
1990 1995 2000 2005 2010 2015 2020 2025
Urban households, millions of
households Annual income
bracket1
Annual income: globals = >,ooo,ooo rupees; strivers = ,–,,; seekers = ,–,; aspirers =
,–,; deprived = <,.
Source: McKinsey Global Institute analysis
Actual Forecast
Seekers
Strivers
Aspirers
Globals
Deprived
Middle class
Waves of change
 
6
See MGI’s parallel study on China’s consu mer market, F rom Made in C hin a to Sol d in China: The Ri se
of the Chinese Urban Consu mer, available free of charge online at www.mckinsey.com/mg i.

The McKinsey Quarterly 2007 Number 3
58
These “global” Indians live mostly in the eight largest cities, so they are very
accessible to large domestic and multinational companies. Further, they have
tastes similar to those of their counterparts in developed countries: brand name
goods, vacations abroad, the latest consumer electronics, and high-end cars.
Changes in consumption
As Indians continue to climb the economic ladder, the composition of their
spending will change considerably. In a pattern witnessed in many other
developing countries, discretionary expenditures, such as mobile phones and
personal-care products, will take up more room in the nation’s shopping
basket.
This shift from necessities, dened in our analysis as food and clothing,7 is
already under way—and taking place at lower income levels than we have
seen in other countries (Exhibit 5). We expect that discretionary spending in
India will rise from 52 percent of total private spending today to 70 percent
in 2025. South Korea went through a similar transformation in the 1980s,
when its per capita income levels were about twice those of India now.
Food (including beverages and tobacco) will post the sharpest decline in
relative consumption, even as overall spending in the category rises. The fall
in the share of food expenditures during our forecast period—to 25 per-
cent, from 42 percent—is linked closely to the growth of the middle class.
Despite this relative decline, food will remain the single largest category
of expenditure, and we expect that growth in consumption will accelerate to
4.5 percent annually, from 3 percent over the past 20 years.
That growth, however, will appear tepid compared with the rise of other
categories. In particular, spending on purchases that improve the economic
prospects and quality of life of a person or family—health, education,
transport, and communications—will soar and eventually command a greater
share of consumption than they do elsewhere. The inadequacy of India’s
public-health system, for example, means that private health care is a high
priority for many Indian families when their incomes grow. This impera-
tive will drive growth in private health care spending by almost 11 percent
a year, so that it will account for 13 percent of the purchases of Indian
households by 2025, a larger share than current levels in all of the countries
we examined8 except the United States.
In another remarkable shift, spending on education will grow by 11 percent
over the next 20 years, to 9 percent of household consumption, higher
7
Housing too cou ld reasonably be considered a necessit y, but we excluded it in our cross-cou ntry comparisons
because of signicant variations i n national housing market str uctures, regulations, and me asurement
methodologies. By contrast, the consumption of food a nd appa rel is fairly compa rable across count ries.
8
Brazi l, China, G erma ny, South Kore a, and t he United States.

Tracking the growth of India’s middle class 59
than today’s levels in any of our benchmark countries. In rural areas,
households emerging from poverty will make educating their children a
priority, while higher-income urbanites will be spending more on
better-quality education, university degrees, and study-abroad programs.
Meanwhile, despite India’s fondness for cricket and “Bollywood”
movies, recreational products and services will take a smaller slice of
household spending there than in other countries.
Transportation, already the largest category of expense after food, will take
a bigger portion of household budgets in coming years, exceeding its share
in all of our benchmark countries. The highest growth will come from car
purchases. Categories such as clothing and household goods are expected
to post slower annual growth relative to overall consumption—6.4 percent
and 6.9 percent, respectively—and thus to lose share of wallet. Yet even
in these categories, growth rates will remain highly attractive as compared
with those in other markets around the world.
What it means for businesses
Three-quarters of India’s consumer market in 2025 doesn’t exist today—
about 52.6 trillion rupees a year in future purchases will be up for grabs.
Also, India’s rapid upward mobility means that many of India’s households
34
5
9
9
6
19
12
Health care
Education, recreation
Communication
Transportation
Personal products, services
Household products
Housing, utilities3
Apparel
Food, beverages, and tobacco
100% (thousand Indian rupees2) =
WebEx 2007
MGI India consumers
Exhibit 5 of 5
Glance: The focus of India’s household budgets will shift from basic necessities to discretionary items.
Exhibit title: Beyond necessities
1995
56
5
60
14
20054
42
82
6
8
7
5
17
12
2015 2025
140
25
5
11
13
9
6
20
10
248
3
2
3
1
2
3
3
3
Share of average annual household consumption, %1
Figures may not sum to %, because of rounding.
Real  rupees; . rupees =  in real  dollars or . rupees =  adjusted for purchasing power parity.
McKinsey Global Institute’s cross-country comparisons of necessary consumption exclude housing from the category of necessity
because of signicant variations in national housing market structures, regulations, and measurement methodologies.
Estimated.
Source: McKinsey Global Institute analysis
4
4
11
Spending on necessities
(ie, food, apparel3)
Discretionary spending
Forecast
Beyond necessities
 

The McKinsey Quarterly 2007 Number 3
60
will be new consumers, enjoying signicant discretionary consumption
in the organized economy for the rst time in their lives. Incumbents and
challengers alike face a sea change. India’s incumbents, mostly domestic
companies, will start with many advantages: existing relationships with
customers, an understanding of their needs, and recognized brands.
The incumbents also have established distribution channels—very impor-
tant in a country of vast geography and limited infrastructure.
But growing incomes and consumption will pressure incumbents from
two directions. First, such companies must adjust to the pace and magni-
tude of change, for as consumers rise through the income brackets,
their needs, tastes, aspirations, and brand loyalties will evolve along with
their lifestyles. Second, India’s growing consumption will attract
a raft of challengers, and ongoing economic reform will signicantly
intensify competition in many markets. New competition will come
from multinationals entering the Indian market, from established Indian
companies looking for expansion opportunities, and from entrepre-
neurs. Indeed, if the country’s policy makers create the conditions for
India’s entrepreneurs to succeed, major new companies could be built
on the back of consumer growth.
Many incumbents haven’t prepared enough for this discontinuity. They
will have to develop a deep understanding of how the consumer’s needs
and aspirations will change as incomes grow and nd ways of creating
innovative products that meet those changing needs. In addition, they must
think about how they should introduce new consumers to their products,
whether their brands are appropriate for those consumers, and what prices
and cost positions will help them compete most effectively for a share
of this new middle-class market. Nor is that all: incumbents will have to
keep a wary eye on the actions of their current competitors and on new
market entrants. That’s a full agenda, and companies that begin preparing
today will be in the best position to benet from the changes.
For attackers, the challenge will be to spot the gaps and opportunities that
arise as India’s income and class structure change; they might, for
example, ask themselves where small markets or limited competition, or
both, have served middle-class consumers poorly. Attackers could also
turn to other emerging economies to seek lessons on how tastes and needs
will likely evolve in India, perhaps looking in particular for categories
in which spending shifted from local products and brands to international
ones as aspirations rose. Attackers seeking to exploit these changes
should consider what new needs will be unique to Indian tastes and the
market as the middle class grows.

Tracking the growth of India’s middle class 61
In India, as in many emerging markets, multinational companies will nd
themselves squeezed between the desire of the country’s consumers for
a modern middle-class lifestyle and the realities of their limited budgets.
In 2005 the average middle-class family spent just over 300,000 rupees
annually—roughly $6,600 —a very modest sum in real terms, but in PPP
terms equal to around $35,000. As one multinational executive noted,
however, “You can’t put PPP dollars in the bank, only real dollars.” Multi-
nationals must innovate to deliver an aspirational middle-class lifestyle
to families on an Indian budget. Companies that can develop new business
models, design products with carefully targeted features, and create
brands that appeal to India’s upwardly mobile people will attract huge
numbers of eager consumers.
The future we have described assumes that India will continue on its recent
path of strong growth. There are many reasons to believe that this
assumption is realistic, most notably the scope for improved productivity
in the economy. But India’s outlook depends strongly on continued long-
term economic reforms that are needed to address serious deciencies in
the country’s infrastructure, modernize the nancial system, and promote
investment in human capital through better education and health care.
India’s emergence as the world’s fth-largest consumer economy will bring
signicant benets to the country and the world. Growth will pull hundreds
of millions of people out of poverty and into the world’s middle class.
With rising incomes, Indians will have the opportunity to realize comforts
and pleasures enjoyed by middle-class families around the world. In
addition, rising domestic consumption will create further economic growth
and employment as companies work to meet the new consumer demand.
For the world’s businesses, India represents one of the largest consumer mar-
ket opportunities of the next two decades. During the rst millennium,
merchants referred to India’s glittering and dynamic market as the “bird of
gold.” That bird is preparing to take ight again.
Q
The authors wish to thank Jonathan Ablett, Aadarsh Baijal, Anupam Bose, Geoffrey Greene,
and Shishir Gupta for their substantial work on this project and to recognize
Ulrich Gersch, Ezra Greenberg, and Sumit Gupta for important contributions to the project’s
leadership. We would also like to thank Dr. Suman Bery and Dr. Rajesh Shukla
for access to NCA ER’s data and for very helpful input into the project.
Eric Beinhocke r is with the McKinsey Global Institute,
where Diana Farre ll is director; Adil Zainulbhai is a director in the Mumbai ofce.
Copyright © 2007 McKinsey & Company. All rights reserved.