Wednesday, 26th April 2007 will go down in the country's history as a red letter day. India became the 12th country to join the exclusive club of economic powers, whose GDP, at nominal (market) prices, has crossed US $ One Trillion (Rs. 41 lakh crore) mark. This became possible thanks to appreciation of rupee vis-à-vis US dollar. On this day, the Indian rupee touched the nine year high level of Rs. 40.94 per dollar.
Given the current annual rate of growth of 9.2% for GDP and inflation, there is no danger of India sliding down to a sub-trillion level. In fact, the country, was anyway slated to achieve this distinction by the end of the second quarter of this financial year 2007-08 .
While, the trillion dollar club is headed by the United States (GDP at $12.46 trillion), other members of the exclusive club based on absolute numbers are: Japan (4.51), Germany (2.78), China (2.23), UK (2.19), France (2.11), Italy (1.72), Spain (1.12), Canada (1.11).
India 's GDP, when calculated on Purchasing Power Parity (PPP) basis, is much higher at about $4 trillion.
Interestingly, on this day, stretching the definition of exchange traded Indian companies a little bit, stock market capitalisation of the country, also touched the $1 trillion mark.
Higher GDP means higher disposable income, which leads to higher consumption. And higher consumption means higher retailing.
India has come a long way from 'international basket' case, a few years ago.