India Breaks into Top 5 World’s Most Equal Nations, Surpasses US and China

India’s income inequality has fallen sharply over the past decade, making it the fourth-most equal country globally, according to World Bank data.

The World Bank's Spring 2025 Poverty and Equity Brief reports the nation’s Gini Index (a measure of income or consumption distribution) stood at 25.5 in 2022–23, down from 28.8 in 2011–12, placing India just behind the Slovak Republic, Slovenia, and Belarus in global rankings.

The report, which covers 167 economies, also highlights a reduction in extreme poverty. The share of Indians living on less than $2.15 per day plunged from 16.2% in 2011–12 to 2.3% in 2022–23.

This translates to roughly 171 million people lifted out of extreme poverty over the same period, reflecting one of the fastest poverty-alleviation trajectories among emerging markets.

Government Response

The government attributed these gains to targeted welfare and financial-inclusion initiatives launched over the past decade.

Schemes such as PM Jan Dhan Yojana, which opened bank accounts for more than 450 million households; the Direct Benefit Transfer system, which channels subsidies directly to beneficiaries; and Stand-Up India, which facilitates loans for women and underrepresented entrepreneurs, have collectively widened access to banking, healthcare, and livelihoods.

In a release from the Ministry of Social Welfare, the government stated that sustained progress in both poverty reduction and income equality is essential to ensuring that the benefits of growth reach all segments of society.

“The Gini Index of 25.5 is not just a number,” noted the ministry’s release. “It reflects real change in people’s lives. More families now have access to food, banking, healthcare and jobs,” it said.

Global Standards

While India now sits in the “moderately low” inequality bracket, defined by Gini scores between 25 and 30, it remains on the cusp of the “low inequality” category, which begins at a score of 25.

China’s Gini Index is 35.7, and the United States registers 41.8, underscoring India’s relatively equitable income distribution among large economies.

Globally, only 30 countries achieve a Gini Index of 25–30, a cohort that includes several European welfare states such as Iceland, Norway, Finland, and Belgium, as well as dynamic economies like Poland and high-income Gulf nations including the United Arab Emirates.

India’s inclusion among these peers signals growing recognition of its efforts to marry robust economic growth with social equity.