"While India still has a large middle class at around 140 million people, it has differentiated over the last 10 years, with the upper middle class evolving into a true upper class. This phenomenon is partly explained by the challenges facing the IT sector, long regarded as an engine of growth. Although this social group is found across the entire territory, it remains particularly concentrated in the South and in major cities."

Christophe Jaffrelot, Senior Fellow – Democracy and Populism at Institut Montaigne.

A fragmented middle class

Behind the image of a single market of 1.4 billion inhabitants lies a much more complex reality. Since the 2010s, the Indian middle class has split into two distinct poles. While the lower middle class has experienced stagnation and declining purchasing power, the upper middle class has soared, now accounting for 57.7% of the national income.

For businesses, the data indicates that the high purchasing power consumer market is actually limited to 140 million individuals (or approximately 30 million households).
 

An archipelago of wealth: Southern and Western India

This affluent population is not evenly distributed across the territory: it is concentrated in “archipelagos of wealth,” mainly in India’s southern and western states. The resulting disparities are striking: GDP per inhabitant in a southern state, such as Karnataka, is now 5.7 times higher than that of Bihar, in the North. 

More than a sociological diagnosis, these figures provide international executives with a roadmap for directing investments towards the “real” market by precisely mapping the key metropolitan areas that concentrate high-purchasing-power consumers, such as Hyderabad, Bangalore, Chennai, and Coimbatore.

The EU-India Trade Agreement: A 10-Year Framework for European Economic Actors

This publication analyzes the key provisions and trade-offs of the free trade agreement concluded in early 2026 between Brussels and New Delhi. For European industries such as automotive, spirits, or machine tools, the paper serves as a guide for anticipating the exact trajectory of tariff barrier reduction:

• Automotive: Customs duties reduced from 110% to 10% (subject to a quota of 250,000 vehicles/year).
• Wines and spirits: Tariffs reduced from 150% to 75% in 10 years, with a long-term target of 40%.
• Machine tools and electrical equipment : Complete elimination of taxes within 10 years.
   

Beyond customs barriers, the study evaluates market access structures for European companies. Faced with local regulatory specificities, the paper identifies three viable distribution channels for reaching the upper middle class: luxury retail spaces in five-star hotels, shopping malls, and fast-growing direct-to-consumer (DTC) online sales strategies.