India faces 'double burden' of low incomes and extreme inequality, finds landmark global study

By Jag Jivan 

The 2026 World Inequality Report reveals stark and persistent inequalities across income, wealth, gender, and global financial systems, with India positioned at the centre of several critical trends. The report, drawing on the work of over 200 researchers coordinated by the World Inequality Lab, provides a comprehensive assessment of global disparities up to 2025.

India exemplifies the global "double burden" of low average incomes coupled with extreme internal inequality. The report finds that "average incomes in North America & Oceania and Europe are several times higher than the global mean, while those in Sub-Saharan Africa and South & Southeast Asia remain far below average." India's position within South & Southeast Asia places it in one of the world's most populous yet lower-income regions. 

The data shows a significant shift in India's global standing over recent decades; while "much of its population has moved into the middle 40%" of the global income distribution, indicating the rise of a new middle class, inequality persists intensely within the country.

Wealth concentration in India is severe and exceeds income inequality. The report states that "the top 1% alone controls 37% of global wealth," a pattern mirrored in India where domestic wealth is highly concentrated. Specifically, "in India, the top 1% own about 40.1% of total personal wealth." This extreme concentration means that "the top decile commands the majority in all regions," a reality reflected in India's high wealth gap ratios.

Inequality outlook – India

The report also documents how India, alongside other BRICS nations, faces a structural disadvantage within the global financial architecture. It notes that "BRICS countries face a consistent burden of around 2.1%," highlighting their role as "net providers of capital to wealthier economies." This "exorbitant privilege," once associated solely with the United States, has evolved into a broader advantage for rich nations, creating a system where "poorer nations transfer more than one percent of world GDP to richer ones through debt service, profit repatriation, and financial flows—this is approximately three times more than development aid flowing in the opposite direction."

On gender inequality, the report finds that "women capture just over a quarter of total labour income, a share that has barely shifted since 1990." In South & Southeast Asia, women’s share is only 20%. The gap widens dramatically when unpaid work is accounted for: "when unpaid domestic and care labor is included, the gap widens sharply. On average, women earn only 32% of what men earn per working hour." 

This undervaluation of women's labour represents not only a fairness issue but also, as the report argues, "a structural inefficiency: economies that undervalue half of their population’s labour undermine their own capacity for growth and resilience."

Income shares in India,

1900-2024

The report concludes that rising inequality is a political choice, noting that "the tools exist. The challenge is political will." It points to policy instruments like progressive taxation and global financial reform, suggesting that "even modest rates of a global minimum tax on billionaires and centi-millionaires could raise between 0.45% and 1.11% of global GDP" to fund essential investments. 

For India, a country navigating rapid growth amid profound disparities, the report's findings underscore the urgent need for policies that address extreme concentration at the top while investing in human capital and equitable participation in the global economy.