Context

Recently, India surpassed the UK to become the world's fifth biggest economy.

Key-Highlights

• Leaving behind the UK: India leaped past the UK in the final three months of 2021 to become the fifth-biggest economy. 
• The calculation is based in US dollars, and India extended its lead in the first quarter, according to GDP figures from the International Monetary Fund. 
• India versus UK: On an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter, the size of the Indian economy in nominal cash terms in the quarter through March was $854.7 billion. 
• On the same basis, the UK was $816 billion.
• Sterling has also underperformed the dollar relative to the rupee, with the pound falling 8% against the Indian currency this year.
• Impact on UK: The UK’s decline down the international rankings is an unwelcome backdrop for the new prime minister. 
• The nation is facing the fastest inflation in four decades and rising risks of a recession that the Bank of England says may last well into 2024.
• India’s Progress: The Indian economy is forecast to grow more than 7% this year. 
• A rebound in Indian stocks this quarter has just seen their weighting rise to the second spot in the MSCI Emerging Markets Index, trailing only China’s.
• IMF’s Forecast: It shows India overtaking the UK in dollar terms on an annual basis this year, putting the Asian powerhouse behind just the US, China, Japan and Germany. 
• A decade ago, India ranked 11th among the largest economies, while the UK was 5th.

Comparison between India and UK 

• Population: This is one of the most fundamental differences between the two countries.
• As of 2022, India has a population of 1.41 billion while the UK’s population is 68.5 million. In other words, India’s population is 20 times that of the UK’s.
• GDP per capita: Since there is such a stark difference between the population of the two countries, GDP per capita of India is much lower.
• Poverty levels: At the start of the 19th century, the UK’s share in extreme poverty was considerably higher than India’s.
• However, as things stand today, the relative positions have reversed even though India has made giant strides in curbing poverty.
• Human Development Index: On this front, experts believe India might still take a decade to be where the UK was in 1980.
• Performance of UK in HDI 2019 – 0.932 (score), very high category (HDI tier)
• India’s performance in HDI 2019 – 0.645 (score), medium category (HDI tier).
• Universal Healthcare Coverage: While faster economic growth and the government’s policy focus on healthcare schemes since 2005 have made a distinct improvement for India, there is still a long way to go.

Ranking

• According to the International Monetary Fund, these are the highest ranking countries in the world in nominal GDP:
• United States (GDP: 22.49 trillion)
• China (GDP: 16.4 trillion)
• Japan: (GDP: 5.27 trillion)
• Germany: (GDP: 4.30 trillion)
• India: (GDP: 3.21 trillion)
• United Kingdom: (GDP: 3.2 trillion)