India Surpassing Japan’s Economy Is No Reason for Complacency, Per Capita GDP Remains Low: Claude Smadja

India Poised to Surpass Japan as Fourth-Largest Economy: A Cautionary Tale by WEF’s Former MD

India is on track to overtake Japan and become the world’s fourth-largest economy, a significant milestone. However, Claude Smadja, former Managing Director of the World Economic Forum (WEF), warns against complacency due to India’s low GDP per capita and lag in manufacturing.

GDP Per Capita Disparity

IMF data from April 2025 reveals that India’s GDP per capita of USD 2,878.4 is a mere 8.5% of Japan’s GDP per capita of USD 33,955.7, highlighting a substantial income gap between the two countries. Smadja emphasizes the importance of not solely focusing on economic size but also considering per capita GDP as a crucial indicator of progress.

The Call for Continued Reform

Smadja underscores the necessity for India to accelerate reforms and ensure that economic growth translates into improved living standards for all citizens, not just the burgeoning middle class in urban and rural areas. He believes that India stands at a pivotal juncture in the global technology race, propelled by its significant advantage in big data.

The Strategic Value of Big Data

India’s widespread internet access, mobile phone usage, and Aadhaar identity system have led to an exponential generation of data, positioning the country as a key player alongside China, Europe, and the US. Smadja urges India to protect this strategic asset to drive innovation, technology advancement, and disruptive developments.

Leveraging Data for Inclusive Growth

While recognizing India’s innovative startup ecosystem, Smadja calls for policies to support R&D efforts and enhance corporate India’s technology creation capabilities. He emphasizes the importance of skill development and industrial expansion to achieve the goal of becoming a USD 7 trillion economy by 2030.