Former Managing Director of the World Economic Forum (WEF), Claude Smadja, urges focus on per capita income, reforms, and manufacturing to unlock true economic progress
India’s rise to become the world’s fourth-largest economy, overtaking Japan, is a milestone—but not a reason for national smugness, warns Claude Smadja, former Managing Director of the World Economic Forum (WEF). While India’s nominal GDP is projected to edge past Japan’s by the end of FY26, Smadja says true economic strength lies in per capita income, where India still lags significantly, reported timesofindia.indiatimes.com.
“What counts is the per capita GDP. India is far below Japan in that regard,” Smadja said, adding that this should serve as a wake-up call, not a victory lap.
According to the IMF’s April 2025 World Economic Outlook, India’s GDP is expected to reach $4,187 billion—just ahead of Japan’s $4,186 billion. However, India’s GDP per capita stands at a modest $2,878.4, barely 8.5% of Japan’s $33,955.7. In real terms, an average Japanese citizen earns nearly 12 times more than their Indian counterpart.
Smadja pointed out that the size of the economy indicates global economic weight, but it fails to reflect the quality of life and development experienced by the population. He stressed the need for deeper reforms that uplift all social strata—not just the expanding middle class
To meet its $7-trillion GDP target by 2030, India must revive its manufacturing sector, strengthen worker skills, and utilise its big data advantage.
Smadja argued that India’s industrial contribution to GDP is significantly weaker compared to China’s. Without robust manufacturing growth, achieving the $7-trillion economic target may remain elusive.
Highlighting India’s technological potential, he praised the country’s global edge in big data generation—thanks to high mobile phone penetration, widespread internet access, and Aadhaar-based digital identity systems. Smadja believes that this strategic resource must be protected and harnessed to position India as a leader in future innovations and disruptive technologies.
He concluded that India, alongside China, is uniquely equipped to leverage big data to shape the global technological landscape, provided it prioritises data privacy, innovation, and skill development across its workforce.
