India’s growing economy was expected to eclipse that of Great Britain in 2020, but the Brexit referendum and the resulting effect on the pound has greatly accelerated the process.
Now, for the first time in nearly 150 years, India’s economy manages to come out on top with a 2016 GDP of $2.30 trillion compared to the UK’s $2.29 trillion.
Furthermore, India’s GDP is expected to grow by 6-8% per annum over the next few years compared to UK’s 1-2%.
This is an important and symbolic milestone in India’s economic history. One can compare it to the Japanese victory over Russia in 1905 that helped dispel the belief that the East could never defeat a western power in a military conflict.
India endured a long period of stagnation that began in 1947 when the newly-independent country decided to pursue a socialist economy. Things started to change in the 1990s when India implemented market reforms, and the Asian nation has seen rapid growth over the past two decades.
2016 marks a significant shift in power dynamics between India and the western world, the effects of which have already been seen in recent trade deals with the UK.
India’s GDP per capita is still only one fifth of Great Britain’s, however, and about 20% of Indians are considered “poor.” An estimated 80% of that population lives in rural areas, many of which struggle with inadequate sanitation.