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According to the report, India and emerging Asia are poised to account for 30 per cent of global consumption at purchasing-power parity (PPP) by 2050, a substantial increase from just 12 per cent in 1997
The transformation highlights the growing importance of these regions in the global economic landscape, driven by rising incomes, changing demographics, and evolving consumer preferences, the institute adds. (Getty)
Economies such as India continue to strengthen trade ties across the geopolitical spectrum, says the latest report from the McKinsey Global Institute. The institute also says that the global consumption pools are witnessing a significant shift from regions like North America and Western Europe to India and emerging Asia.
This transformation highlights the growing importance of these regions in the global economic landscape, driven by rising incomes, changing demographics, and evolving consumer preferences, the institute adds.
To quote from the report: “Consumption pools are shifting from North America and Western Europe to emerging Asia and India…. Developing countries will provide a growing share of global labour supply and of consumption, making their productivity and prosperity vital for global growth.”
According to the report, India and emerging Asia are poised to account for 30 per cent of global consumption at purchasing-power parity (PPP) by 2050, a substantial increase from just 12 per cent in 1997.
In contrast, Advanced Asia, North America, and Western Europe are projected to contribute only 30 per cent to global consumption, a sharp decline from their combined 60 per cent share in 1997.
This shift, the report noted, carries profound implications for businesses worldwide. Companies in both developed and developing regions must adapt to this evolving market dynamic.
Over the next 25 years, countries in later-wave regions are expected to drive more than half of global consumption, thanks to their fast-growing young populations and increasing incomes.
The McKinsey Global Institute also says that India’s trade has expanded across the geopolitical spectrum. Some shifts, as per the institute, stand out.
In the case of energy resources, the share sourced from Russia has soared from only about 1 per cent in 2017 to almost 30 per cent in 2024. At the same time, India’s share of trade with the United States and the Europe 30 has been stable or increasing, fuelled by India’s exports to these economies. Their value increased by an annualised 8 and 9 per cent respectively in this period.
In the case of India’s exports of electronics, the share headed for the Europe 30 and the United States rose from less than 40 per cent in 2017 to close to 65 per cent in 2024.
