India tops world list for new millionaires

India is minting new millionaires at a faster pace than anywhere else in the world, buoyed by a fast-growing economy, according to a new study.

There were an estimated 123,000 millionaires in India at the end of 2007 - 22.7 percent more than in the previous 12 months, said the Asia-Pacific Wealth Report, compiled by US investment bank Merrill Lynch and consultants Capgemini

"Despite dislocations in developed markets, the number of high net worth individuals in India grew at a faster rate than the global average," said Pradeep Dokania, head of Global Wealth Management for DSP Merrill Lynch.

"Domestic demand and Asia's appetite for commodities continue to drive wealth accumulation in India," he said.

China was the second in the millionaire stakes.

It had a millionaire population growth of 20.3 percent in the same period followed by South Korea with 18.9 percent.

The figures, released late on Thursday, assessed the wealth of so-called "high net-worth individuals" (HNWIs) as people with more than one million dollars in net assets - excluding primary residences.

"In 2007, the standout markets in the Asia-Pacific region were China and India, with the number of wealthy individuals, and their overall level of wealth, growing at a faster rate than the global averages," the report said.

India's economy grew by nine percent in the financial year to March 2008 while China's economy expanded by 11.9 percent last year, well ahead of other industrialised countries who are feeling the effects of global market turmoil.

But growth is expected to slow this year in both countries, albeit to still strong rates.

In India, the country's economy, which has drawn billions of dollars in foreign investment, has been losing steam as the central bank has aggressively raised interest rates to curb inflation now at 13-year highs.

Economic growth for the first quarter ending June slowed to 7.9 percent, the weakest in three-and-a-half years.

India's stock markets grew by 47.1 percent in 2007, but the benchmark Sensex is down more than 33 percent this year.

China meanwhile has seen growth slow to 10.1 percent in the second quarter of this year.

Still India's millionaire wealth trails behind China and Japan, the study shows, despite Indian tycoons like Mukesh and Anil Ambani who regularly feature on the Forbes magazine billionaire list.

India's millionaires have a combined wealth of 440 billion dollars, compared with 2.12 trillion dollars in China and 3.8 trillion dollars in Japan.

China and Japan account for 62.4 percent of Asia's millionaire wealth, while India's share is just 4.6 percent.

But the report added: "Although the number of emerging-HNWIs in China and India is still relatively small, we expect that within 10 years" it will surpass the mature markets."

As the impact of the US economic slowdown resounds across Asia most of today's millionaires are likely to turn from equities and towards fixed-income securities that offer less volatile returns, the report said in its 2009 outlook.

Asia-Pacific's HNWI wealth is forecast to reach 13.9 trillion dollars by 2012, growing at an annual rate of 7.9 percent.