THE INDIAN DREAMER

India will be the eighth largest wealth centre by 2017 and will create over 400,000 new U.S. dollar-millionaires over the next decade, according to a report by the Economist Intelligence Unit (EIU) on behalf of Barclays Wealth.

The report pegged wealth held by high net worth Indian households to total $1.7 trillion in 2017.
According to a Household Wealth Index, developed by Barclays Wealth and the EIU, India will become the eighth largest wealth market in the next 10 years from the current rank of fourteenth. The United States is expected to continue to dominate the Household Wealth Index, followed by Japan, China, the United Kingdom, Germany, France and Italy.

China is currently in seventh place.

The factors that will drive India's wealth going forward is inherited wealth, promoter's wealth, contribution from professionals and finally, celebrities, according to Satya Bansal, chief executive of Barclays Wealth, India.

The report adds that India's mass affluent population will grow from a negligible amount to nearly two million people by 2017.

The wealthy in India have historically kept much of their wealth in tangible goods, holding more than half of their savings in physical assets like land, houses and gold. Additionally, Indian real estate has generated stellar returns on the back of low interest rates, strong demand and a huge influx of investment from sovereign wealth funds and Middle East investment groups.

The report also said that property accounts for around 43 percent of the overall household wealth.

India has been one of the world's largest consumers of gold and recent estimates suggest that the population owns $200 billion in gold, equal to nearly half of the country's bank deposits, the report added.

"We are seeing a cultural change driving attitudes towards wealth in India. Composition of assets of wealthy Indians is increasingly shifting from physical assets to financial assets," Bansal said.
In the coming decade, Brazil, Russia, India and China are expected to make the most significant wealth gains, according to its wealth forecast of 50 countries.

However, the hotspots of highest wealth density will remain consistent over the next decade and the countries with the highest percentages of dollar millionaires in the study tend to be small, densely populated financial centres, such as Singapore, Hong Kong and Switzerland, the report said.

Barclays Wealth is expected to start operating in India in the second half of 2008.