IN A TIME of global economic uncertainty and systemic recalibration, India continues to shine as a bastion of resilience and progress. The country’s economic trajectory in recent years, and particularly in 2024–25, affirms its position as the fastest growing major economy in the world.
Defying global headwinds, India posted a real Gross Domestic Product (GDP) growth rate of 6.5 per cent for 2024–25, a figure that is expected to persist into 2025–26 according to the Reserve Bank of India (RBI). These numbers underscore not just the size of the Indian economy but the strength of its foundations and the optimism that global investors and domestic stakeholders continue to attach to its future.
India’s steady growth is anchored in strong domestic demand, manageable inflation, high levels of public and private investment, and growing exports. These factors have together created a virtuous cycle that is lifting all sectors of the economy. Rural consumption is rising, urban spending is buoyant, and businesses are operating close to their capacity. The investment environment, both from within and abroad, remains favourable due to stable borrowing costs and policy consistency. Public investment, particularly in infrastructure, remains a central plank of growth, complementing the resurgence of private capital expenditure.
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What makes India’s economic story remarkable is the context in which it is unfolding. The global economy, described by the United Nations as being at a “precarious moment,” is grappling with trade wars, declining cross-border investments, and geopolitical disruptions. Against this turbulent backdrop, India’s economic performance stands as a symbol of continuity and confidence.
The size of India’s economy has almost tripled over the last decade. From Rs 106.57 lakh crore in 2014–15, the GDP at current prices is expected to touch Rs 331.03 lakh crore in 2024–25. In just the past year, nominal GDP increased by 9.9 per cent while real GDP expanded by 6.5 per cent. The country’s structural reforms, emphasis on digitalization, and targeted welfare measures have contributed to this transformation.
One of the more encouraging aspects of this growth has been the moderation in inflation. In May 2025, the Consumer Price Index (CPI) recorded a year-on-year inflation rate of 2.82 per cent, the lowest since February 2019. Food inflation, which often drives overall price levels, dropped to 0.99 per cent. These figures are significant because they signal that economic expansion is being achieved without triggering price volatility. The RBI’s medium-term inflation target of 4 per cent is not only being met but may even be undershot in the coming months, thanks to strong crop yields and controlled commodity prices.
The RBI’s Financial Stability Report from June 2025 affirms that the inflation outlook remains benign, with low risks of imported inflation due to sluggish global demand and relatively stable crude oil prices. This price stability is essential not just for households but also for businesses planning long-term investments, and it reflects the careful calibration of monetary policy and supply-side management.
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Capital markets have emerged as a dynamic engine of economic activity. India’s equity markets are thriving, demonstrating remarkable resilience in the face of global volatility. Retail participation in the markets has surged, with investor numbers rising from 4.9 crore in 2019 to 13.2 crore by the end of 2024. The rise of retail investors reflects a deepening of financial literacy and trust in the formal financial system. Stock markets have also served as a conduit for resource mobilisation, especially through the primary market. Between April and December 2024, India saw 259 initial public offerings (IPOs), a 32.1 per cent increase over the previous year. The capital raised through these IPOs nearly tripled, going from Rs 53,023 crore to Rs 1,53,987 crore.
This surge in investor activity has catapulted India to the top of global IPO rankings, with the country accounting for 30 per cent of global IPO listings in 2024, up from 17 per cent in 2023. This record performance is a testament to the confidence that both domestic and global investors have in India’s economic fundamentals and regulatory environment.
The external sector continues to provide a sturdy buffer for the economy. Foreign exchange reserves stood at USD 697.9 billion as of June 20, 2025. These reserves can cover more than 11 months of imports, acting as a cushion against global shocks. The current account balance showed a surplus of USD 13.5 billion in Q4 2024–25, reflecting strong export performance and consistent remittances. For the full fiscal year, the current account deficit was limited to just 0.6 per cent of GDP, well within sustainable levels.
Foreign Direct Investment (FDI) flows reflect India’s growing attractiveness as a destination for capital. In FY 2024–25, FDI inflows rose to a provisional USD 81.04 billion, marking a 14 per cent increase from the previous year. This is more than double the FDI received in FY 2013–14. The services sector accounted for 19 per cent of total FDI inflows, followed by computer software and hardware at 16 per cent, and trading at 8 per cent. Notably, FDI into the services sector grew by 40.77 per cent, and manufacturing saw an 18 per cent rise, underscoring India’s move toward high-value sectors.
Exports have also played a pivotal role in India’s economic renaissance. Total exports in 2024–25 reached USD 824.9 billion, up 6.01 per cent from the previous year. Services exports contributed USD 387.5 billion, a 13.6 per cent increase, while merchandise exports (excluding petroleum products) touched a record USD 374.1 billion. The growing dominance of sectors like electronics, chemicals, defence, and machinery in India’s export basket speaks to a strategic reorientation of its trade profile toward high-tech and value-added products.
Behind this export momentum lies a robust manufacturing base. The Gross Value Added (GVA) of manufacturing at constant prices rose from Rs 15.6 lakh crore in 2013–14 to Rs 27.5 lakh crore in 2023–24. Though its share in GDP has remained stable at about 17.3 per cent, the absolute growth in manufacturing output illustrates a strengthening industrial backbone. Sectors like electronics and defence production have gained scale, and the government’s Production-Linked Incentive (PLI) schemes have provided the necessary impetus.
India’s economic performance in recent years is not just a story of growth, but of multidimensional progress. Whether it is the narrowing of the current account deficit, the diversification of exports, the stability of the rupee, or the dynamism of the stock market, the underlying theme is that of a maturing economy capable of managing both opportunities and risks. Even amid rising global uncertainty, India’s macroeconomic indicators remain reassuringly strong.
Yet, challenges remain. Global commodity price volatility, geopolitical tensions, and environmental risks could test the resilience of this growth. However, India’s strong foreign exchange reserves, prudent fiscal management, and diversified economic base equip it to navigate these challenges better than most.
The coming years are likely to see India consolidating its gains. Digital infrastructure, green energy investments, and urban transformation will play crucial roles. India is well placed to not only maintain but accelerate its economic momentum, offering a model of balanced and inclusive development. As the world searches for economic anchors in a turbulent era, India’s story offers a rare blend of dynamism, stability, and promise—a story of a nation confidently stepping into its role as a global economic leader.
(The writer can be reached at dipakkurmiglpltd@gmail.com)
(The opinions expressed in this article are those of the authors and do not necessarily reflect the views of Ukhrul Times. Ukhrul Times values and encourages diverse perspectives.)