India's Share of Global Savings Reaches 10.3%, Surpasses US in PPP Rankings: Report

India has become the second-largest contributor to global savings in purchasing power parity (PPP) terms, overtaking the United States, according to a Business Standard report citing a working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM).  

The report estimates India's share of global savings at 10.3% in 2025, compared with 3.3% in 1992. China remains the largest contributor with 31.9%, while the United States' share has declined to 9.4%. 

Three Decades of Change 

The report, The World in Purchasing Power Parity (Trends since 1992), reviews economic data from 1992 to 2025 using four measures, world GDP, per capita income, global savings, and global investment.  

It finds that the share of global savings has gradually shifted towards Asian economies over the last three decades. During the same period, China's share increased from 8.9% to 31.9%, while India's contribution more than tripled.  

The report also notes a decline in the savings share of the United States, Japan and several European economies. 

Savings and Investment Pattern 

According to the report, savings provide the financial resources required for investment across sectors such as infrastructure, manufacturing, and businesses. India accounts for 10.8% of global investment, slightly higher than its 10.3% share of global savings.  

The report says this difference shows a structural current account deficit, as domestic investment continues to exceed domestic savings. The gap is financed through foreign capital inflows. 

China presents a different pattern. Its savings remain higher than investment, allowing it to maintain a current account surplus. The report says this distinction explains the different external financing positions of the two economies despite both being among the world's largest contributors to global investment. 

PPP-Based Comparison 

The study uses purchasing power parity rather than market exchange rates to compare economies. PPP adjusts for differences in domestic prices, allowing output, savings and investment to be compared on a common basis.  

According to the report, this approach provides a better measure of the scale of economic activity across countries. The findings show that the global distribution of savings has changed considerably since the early 1990s.  

Asian economies, particularly China and India, account for a larger share of world savings and investment than they did three decades ago, while the relative contribution of several advanced economies has declined over the same period. 

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Conclusion  

India has moved ahead of the United States in PPP-based global savings, reflecting a shift in the global distribution of savings, investment and economic activity towards Asia. 

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