India, now a $1-trillion economy!

India is now a trillion-dollar economy.
According to a Credit Suisse report, Indian GDP at the current price level of the rupee (Rs 40.76 per $) stands at $1trillion. The strengthening rupee has now made India the 12th country to achieve this milestone.
With the Rupee appreciating to below 41 against the US dollar on Wednesday, it was the first day for the economy to be a trillion-dollar economy.
The report said that India's stock market capitalisation too stands at $944 billion, just shy of the $1-trillion mark. However, if one stretches the definition of what constitutes an Indian stock, plus does a rounding, the Indian stock market is also about a trillion dollars as of Wednesday.
The first ever attainment of these landmarks is likely to create many self-congratulations and media events in the coming days. Fundamentally, they do not change anything, but the likely hoopla will add to investor sentiment, says the Credit Suisse report.
The report, adding some history trivia, says that eight out of the 10 economies had their stock markets rise in the one-year period after they first crossed $1trillion mark in GDP. The United Kingdom is the only economy to stop being a trillion-dollar economy for a while after attaining the status the first time.
The report, however, says that there is nothing magical about $1trillion or any such mark; and that it is wrong to take quarter-end GDP and some interim exchange rates for the calculation of GDP in a foreign currency. Any apparent GDP growth in foreign currency denomination due to the exchange rate move is not real growth, it said.
The other economy that crossed the same mark recently is Russia, which was within the last 2.5% as per the latest published GDP data of Dec-06. Somewhat coincidentally perhaps, the economies that crossed $1t-rillion mark mostly had positive equity markets in a year after they first crossed the level, even though some may want to partly attribute the "coincidence" to the halo effect on inflows created by reaching such a milestone.
The trillion-dollar club
Country
GDP in Dec '06 ($ billion)
First crossed $1-trillion mark on
United States
13,458
31/12/1969
Japan
4,464
31/12/1980
Germany
2,890
31/12/1987
China
2,554
31/12/1998
United Kingdom
2,358
30/09/1990
France
2,227
31/12/1989
Italy
1,841
31/03/1990
Spain
1,217
31/12/2004
Canada
1,273
31/12/2005
Brazil
1,067
29/09/2006
Russia
975
N/A
India *
* 1000
25/04/2007
*-only India's GDP numbers are not as of Dec-06 but as of Mar-07 and using the most recent exchange rate.Source: Credit Suisse estimates
The Reserve Bank of India said on Monday that the Indian economy is expected to post a robust growth for the fourth straight year, expanding by an accelerated 9.2 per cent in 2006-07 as against 9 per cent in the previous fiscal.
The acceleration in growth during 2006-07 is driven by continued momentum in the services and manufacturing sectors, growth of which are expected to be in double-digit figures.
Combined NRI wealth more than India's GDP
The combined wealth of the 20-million strong non-resident Indians community is estimated to be over $1 trillion dollars -- more than the country's entire economy.
Overseas Indians are estimated to hold financial wealth, apart from real estate, gold and art, of over $500 billion. The total wealth would be over $1 trillion, according to the report by High-Powered Expert Committee appointed by the Centre to suggest ways to make Mumbai an international financial centre.
These NRIs were a natural beachhead as a customer base where an Indian Personal Wealth Management industry can get started. Their wealth management services were presently being sourced almost exclusively from abroad, the report said.
The report listed 11 activities typically provided by an international financial centre (IFC) and referred to PWM as one of the most important activities undertaken at an IFC.
According to the report, PWM for high-net worth individuals is estimated to involve management of personal assets of $8-10 trillion globally.