Sri Lanka Becomes Upper-middle-income Country, India Still Lower-middle-income
As per World Bank’s latest income classification, five countries, including Sri Lanka, Vietnam and Philippines, have moved into the upper middle-income category with a gross national income (GNI) per capita between $4,636 and $14,375
Chennai: Sri Lanka, which was facing an economic crisis till 2024, has moved into the upper-middle income category, as per the World Bank’s latest classification, while India, despite being the fastest growing large economy, continues to be a lower middle-income country.
As per World Bank’s latest income classification, five countries, including Sri Lanka, Vietnam and Philippines, have moved into the upper middle-income category with a gross national income (GNI) per capita between $4,636 and $14,375.
Sri Lanka had witnessed an economic crisis between 2019 and 2024. It went through unprecedented levels of inflation, near depletion of foreign exchange and sovereign default. In 2025, it achieved a GNI per capita of $4670.
“Sri Lanka is a story of recovery. Just three years after a severe economic crisis brought the country to the brink of collapse in 2022, real GDP grew by 5% in 2025, driven by a rebound across industries and growth in financial and tourism services. The reclassification is a marker of resilience, though the country only narrowly crossed the threshold,” World Bank said.
As per the data, India’s gross national income (GNI) per capita was at $2760 in 2025 and is classified as a lower-middle-income country - one with a per capita income of between $1,176 and $4,635. It moved out of low-income country status in 2009 and has remained in the category till now. India aspires to become a high-income economy by 2047 for which it needs a GNI per capita income of more than $14,375.
“For India to become a high-income economy by 2047, its GNI per capita will have to increase by nearly 8 times over the current levels; growth would have to accelerate further and remain high over the next two decades,” World Bank had said in a report.
Indian states are quite divergent in per capita income, with real per capita income ranging from Rs 32,174 in Bihar to Rs 295,114 in Goa in 2023.
A 2047 high-income scenario will require relatively developed states to continue to grow fast while less developed states catch up. In 2023, relatively developed states such as Maharashtra, Gujarat, Karnataka, Tamil Nadu, and Delhi accounted for 26 percent of India’s population but for over 44 percent of its GDP. Meanwhile, less developed states such as Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan accounted for 38 percent of India’s population but only 19 percent of its GDP.
Going forward, whether India grows at business-as-usual or accelerated rates will depend largely on the rate of growth its less developed states achieve. If states that currently have per capita income levels below the national average start growing at an average real rate of 9 percent per annum, would allow India to reach the HIC threshold by 2047.
Economies are currently divided into four income groupings: low, lower-middle, upper-middle, and high.
