Introduction
India has consistently demonstrated robust economic growth, emerging as one of the fastest-growing major economies globally. This momentum is set to continue, with GDP projected to grow by 6.5% in FY25, fuelled by strong domestic demand, sustained infrastructure development, and proactive government policies. The International Monetary Fund (IMF) highlights that India’s GDP is expected to nearly double from Rs. 1,79,94,900 crore (US$ 2.1 trillion) in 2015 to Rs. 3,65,89,630 crore (US$ 4.27 trillion) by the end of 2025. With ongoing reforms and rising investments, India's growth story is compelling and trending on the global stage.
Further strengthening this narrative, S&P Global projects India to become the world’s third-largest economy by 2030–31, surpassing Japan and Germany. This trajectory is underpinned by macroeconomic stability, a resilient external sector, narrowing fiscal deficit, easing inflation, and high consumption expenditure. Additionally, improving employment prospects and the government’s focus on long-term structural reforms are expected to play a key role in sustaining growth. Moreover, export performance has experienced remarkable growth over the past decade, reflecting the increasing credibility and demand for Indian products in the global marketplace.
India's total exports touched Rs. 36,97,400 crore (US$ 433.56 billion) in FY25, a significant increase from Rs. 25,63,517 crore (US$ 300.60 billion) in FY18. During this period, India's share of world merchandise exports also improved, rising from 1.66% to 1.81%, advancing the country from 20th to 17th position globally.
The demographic transition, marked by a lower infant mortality rate and a consistent growth in literacy rates, further enhances India's advantageous position. With improved income distribution, heightened employment rates, and globally competitive social amenity provisions, there is potential for India's per capita GDP to expand in the next 25 years, mirroring the growth seen in the preceding 75 years.
In the Union Budget 2025-26, the government proposed to increase allocation for capital expenditure to Rs. 11.21 lakh crore (US$ 129.0 billion), up 10.1% from revised budget estimate of Rs. 10.18 lakh crore (US$ 117.2 billion) in FY25.
In FY25, the following key indicators highlighted improved performances:
- Private Final Consumption Expenditure (PFCE) is projected to grow by 7.6% in FY25 over the growth rate of 5.6% in FY24.
- According to second advance estimates, India’s foodgrain production for FY25 is estimated at 330.9 million tonnes, marking a 4.8% increase from FY24, driven by a 6.8% rise in kharif output and a 2.8% increase in rabi production.
- Consumer Price Index (CPI) – Combined inflation was 3.16% in April 2025 against 4.83% in April 2024.
- Services PMI increased to 59.1 in April 2025 as compared to 58.5 in March 2025.
- The consumption of petroleum products during FY26 (April 2025) stood at 20.129 MMT in volume terms.
- Quick Estimates for India’s Index of Industrial Production (IIP) for March 2025 stood at 164.8 against 160.0 in March 2024.
- The combined index of eight core industries stood at 164.9 for FY25 (provisional) compared to 157.8 for FY24. For the month of April 2025, the combined index of eight core industries stood at 162.5.
- Cargo traffic handled at major ports stood at 71.97 million tonnes (MMT) during April 2025.
- Railway freight traffic stood at 1,617.38 million tonnes during FY25 an increase of 1.68% compared to previous year.
- In April 2025, the number of e-way bills increased to 11.93 crore, representing a significant rise of 23% compared to April 2024.
- The gross GST (Goods and Services Tax) revenue collection stood at Rs. 2,36,716 crore (US$ 27.62 billion) in April 2025.
- As of April 24, 2025, the Indian basket of crude oil stood at Rs. 5,501 (US$ 63.99) a barrel, decreasing from April 2025, which was Rs. 5,823 (US$ 67.73).
- In May 2025, UPI volume stood at 11,617.6 million transactions worth Rs. 15,99,337 crore (US$ 186.64 billion).
- India’s merchandise exports in April 2025 were estimated at Rs. 3,29,821 crore (US$ 38.49 billion).
- Merchandise imports in April 2025 were estimated at Rs. 5,56,214 crore (US$ 64.91 billion).
- The average daily net injection under the liquidity adjustment facility (LAF) stood at Rs. 47,294 crore (US$ 5.50 billion) as on March 16, 2025.
- In FY25, as of May 9, 2025, foreign exchange reserves in India stood at Rs. 58,97,173 crore (US$ 688.20 billion).
- As of May 9, 2025, the currency in circulation (CIC) registered Rs. 38,03,109 crore (US$ 443.82 billion).
- Rupee strength reached Rs. 85.66/US$ as of May 22, 2025.
- The total foreign direct investment (FDI) equity inflow received by India in FY25 (October to December 2024) amounted to US$ 18.98 billion.
- According to RBI:
- Bank credit stood at Rs. 1,82,86,313 crore (US$ 2.13 trillion) as of May 2, 2025.
- Credit to non-food industries stood at Rs. 1,82,23,867 crore (US$ 2.12 trillion) as of May 2, 2025.
India's headline annual retail inflation fell from 3.25% in March to 2.92% in April 2025, driven by lower food prices, indicating a sustained easing in price pressures. India's job market sustained its upward trajectory in February, registering a 41% YoY growth, primarily propelled by increased hiring of fresh graduates.
During April 2025, private equity (PE) and venture capital (VC) investments stood at Rs. 40,274 crore (US$ 4.7 billion) declining 20% MoM from Rs. 43,503 crore (US$ 5.1 billion) in March 2025.
According to the Economic Survey 2024-25, from July to November 2024, the government's capital expenditure increased by 8.2%, with the defence, railways, and road transport sectors collectively representing 75% of the total capital outlay.
In addition, steady growth momentum in service activity continues with healthy PMI levels from October 2024 to February 2025, attributing to the growth in output and accommodating demand conditions, leading to a sustained upturn in sales. The growth impetus in rail freight and port traffic remains upbeat, with further improvement in the domestic aviation sector. Strong growth in fuel demand, domestic vehicle sales, and high UPI transactions also reflect healthy demand conditions.
The narrowing merchandise trade deficit and the upward trajectory of net services receipts are anticipated to contribute to an enhancement in India's current account deficit.
The Union Budget 2025-26, themed "Sabka Vikas," focuses on balanced growth across regions. It prioritizes agriculture, MSMEs, investment, and exports as key growth engines. Initiatives include the Prime Minister Dhan-Dhaanya Krishi Yojana for agriculture, support for first-time entrepreneurs, and a push for domestic manufacturing through customs duty rationalization. The budget also emphasises education, healthcare, and infrastructure development, with plans for 50,000 Atal Tinkering Labs and new medical colleges.
In the near future, India’s banking and financial sector is expected to thrive. Despite foreign investors booking profits in the capital market, the outlook remains largely positive for the country. As global conditions stabilise, foreign investors are expected to re-enter the market and capture the upcoming growth wave. The collective efforts invested over the past several years have laid a robust foundation, providing a sturdy platform upon which the framework of a middle-income economy can be built.
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