India Overtakes US in PPP-Based Global Savings, Ranks Second After China: Report

India has surpassed the United States to become the world’s second-largest contributor to global savings in purchasing power parity (PPP) terms, according to a new working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM). The report, titled “The World in Purchasing Power Parity (Trends since 1992)”, highlights India’s growing economic influence, noting that the country’s share of global savings has increased sharply over the past three decades. India’s contribution rose from 3.3% in 1992 to 10.3% in 2025, placing it ahead of the US, whose share declined to 9.4% during the same period. China remains the world’s largest contributor, accounting for 31.9% of global savings.

The increase in India’s share of global savings reflects the country’s expanding economic capacity and its growing ability to generate resources for investment. Savings are considered a key driver of economic growth as they provide funding for infrastructure projects, industrial expansion, businesses, and long-term development.

The report notes that while India’s economic progress is often measured through GDP rankings, its rising contribution to global savings offers another perspective on its growing role in the international economy. The analysis uses purchasing power parity, a method that adjusts for differences in price levels across countries, allowing for a more accurate comparison of economic strength and activity.

The study examines changes in the global economic landscape between 1992 and 2025 through indicators such as global GDP share, per-capita income, savings, and investment. It highlights a major shift in economic influence from Western economies towards Asia over the past three decades. During this period, the share of global savings held by countries such as the United States, Japan, and several European economies declined, while Asian nations recorded significant gains. China’s share of global savings increased from 8.9% in 1992 to 31.9% in 2025, while India’s share more than tripled. The report suggests that this trend reflects the growing importance of Asian economies, particularly China, India, and Indonesia, in global production, investment, and financial activity.

However, despite India’s rise as one of the world’s largest sources of savings, the country continues to invest slightly more than it saves. The report estimates India’s share of global investment at 10.8%, compared with its 10.3% share of global savings. This difference contributes to India’s continued current account deficit, as the country relies on foreign capital inflows to support the gap between domestic savings and investment requirements. In contrast, China saves more than it invests, allowing it to maintain a current account surplus.

The findings underline India’s changing position in the global economy, with its expanding savings base reflecting stronger economic activity and increasing influence in global financial trends. As the country continues to grow, its ability to generate and channel savings into productive investments will remain a key factor in shaping its future economic trajectory.