Skip to main content

Amrit Dhillon is a New Delhi-based journalist.


Apple chief executive officer Tim Cook visited India last month in the hope the country will be its next China. He made the visit to push Apple's proposals to open its own stores and sell second-hand phones. A few weeks before his visit, he told analysts: "I sort of view India as where China was seven to 10 years ago." The visit was aimed at tapping into India's growth as China's economy slows. No doubt Apple is betting, like other multinationals, on the size of the Indian middle class.

That class is a strange creature. It has always been different from its counterpart in other countries. For a start, it is lowbrow. Middle-class Indians, in general, have little interest in classical music, literature, theatre or any cinema except Bollywood. Their hobbies are shopping and visiting relatives. Sit in the departure lounge of any airport in India or in the trains patronized by the affluent, and you will hardly ever see anyone with a book in their hands.

Intellectual pursuits are shunned. Engaging with ideas is alien. They do not, as other middle classes do, set the agenda of public debate, or help to form public opinion and lead public discourse on issues of the day. That is left to India's minuscule elite of academics and intellectuals.

Over the years, it has gradually emerged that India's middle class is different in another way: its size. When leaders of foreign multinationals used to scratch their heads many years ago and wonder where exactly this celebrated middle class resided (their goods were not selling in the volumes they had expected), the simple answer was that the size of the middle class had been grossly overestimated.

A few years ago, Coca-Cola CEO Muhtar Kent said the scale of the opportunity represented by India's middle class was equivalent to adding a city the size of New York to the world every three months. In 2008, the McKinsey Global Institute predicted that India's middle class will grow to 583 million from 50 million people in the next two decades.

However, according to a Pew Research Center study last year, the number of people who can be called middle-class in India, in terms of income, stood at a mere 3 per cent. "Although the poverty rate in India fell from 35 per cent in 2001 to 20 per cent in 2011, the share of the Indian population that could be considered middle-income increased from 1 per cent in 2001 to just 3 per cent in 2011," the report said. It added: "It is clear from these estimates that India did not keep pace with China in creating a middle class in this century."

One reason for the inflated estimates of its size was the tendency of Indians to overstate their position. This is common. I have been to neighbourhoods in the capital where people's lifestyles are far lower than those of the working classes in Europe and heard families living in slum conditions describe themselves as "middle class." The phrase is a loose term used to denote anyone who is not living in abject poverty.

India is not China. Indian consumers have significantly less disposable income than Chinese. Per-capita economic output is 31 per cent less than in China a decade ago. This is bad news not just for Apple, but also for the Indian government. The policy implications are massive. Less than a third of India's households have easy access to piped water. Almost half the population has no toilet. Roughly two out of five children are stunted from lack of proper nutrition.

With so many of its people still on low incomes and so lacking in basic facilities, it means the mountain that India knew it had to climb in providing roads, schools, hospitals, health care, water, electricity and homes is rather higher than it had thought.

According to the Pew report, India succeeded in lifting about 133 million of its citizens out of poverty from 2001 to 2011. That is good news. The great Indian middle class, though, remains more an aspiration than a reality. India is nowhere near where China was seven years ago.

'Tis a pity, for Apple and for India.