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India's middle class set to drive 93% of consumer spending
04 Jul 2026

India's burgeoning middle class is set to be the country's biggest economic driver in the coming decade, Finance Minister Nirmala Sitharaman said on Friday.

She made the remarks while addressing an economic forum at Aix-Marseille University in France.

Sitharaman said that the middle class and slightly affluent population are likely to account for a whopping 93% of total consumer spending by 2036.

Middle class engine of growth: Sitharaman
Economic impact

Sitharaman emphasized the crucial role of the middle class in driving economic growth

The Finance Minister attributed India's post-COVID-19 economic resilience to consumption by this demographic, thereby creating a "virtuous cycle of economic activity."

Sitharaman said nearly 31% of India's population is currently in the middle class. The segment grew at an annual rate of 6.3% from 1995 to 2021.

According to OECD projections, India is likely to overtake China in terms of absolute middle-class numbers between 2030 and 2035.

Rise in new economic centers across India
Economic hubs

Sitharaman also highlighted that at least 500 Indian cities are likely to emerge as new centers of economic activity.

This is in line with changing consumption patterns and rising incomes across the country.

The Finance Minister said government initiatives aimed at expanding financial inclusion have helped bring more people into the middle class, with 248 million people moving out of multidimensional poverty.

Expansion of middle class to boost AI capabilities
Tech impact

Sitharaman also linked the expansion of the middle class to India's growing capabilities in artificial intelligence (AI).

She said around 40% of India's exports come from Micro, Small and Medium Enterprises (MSMEs), many of which are rapidly adopting AI-led business models.

"We are now seeing AI-ready young people going to industries to equip them with AI capabilities," Sitharaman said.