The Indian economy continues to exhibit strong momentum despite a backdrop of global uncertainty, according to recent reports. Several key indicators point towards sustained growth, driven by both domestic and international factors.

Resilient Growth and Key Indicators

India's GDP growth has been robust, with various organizations projecting continued expansion. The International Monetary Fund (IMF) projects a growth rate of 6.6% for 2025, outpacing China's expected growth of 4.8%. Deloitte projects a baseline economic growth of 6.7% to 6.9% for this fiscal year. Crisil, an S&P Global company, forecasts a 6.5% GDP growth for fiscal year 2026, mirroring the rate for fiscal year 2025. This resilience is further underscored by a 7.8% year-over-year GDP growth in the April to June quarter of fiscal year 2025-26.

Several factors contribute to this positive outlook. Rising GST collections, increased e-way bill generation, and improved consumer sentiment all indicate strengthening economic activity. A revival in manufacturing, supported by stronger production, order books, and capacity utilization, also plays a significant role. Rural demand remains steady, bolstered by increased household consumption.

Inflation and Fiscal Management

Retail inflation has eased significantly, reaching its lowest levels in several years. In March 2025, India recorded its lowest year-on-year inflation since September 2019. This moderation in inflation has been aided by government interventions and favorable harvests. The government remains committed to fiscal consolidation, with the fiscal deficit steadily declining from its pandemic highs. This fiscal discipline increases the availability of domestic savings for private-sector investment and reduces the overall cost of capital.

Global Challenges and Opportunities

Despite the positive domestic trends, the Indian economy faces challenges from global uncertainties, including trade-related disruptions and geopolitical factors. The IMF has noted that prolonged uncertainty and protectionism continue to pose challenges to global growth. The impact of US tariffs on Indian goods remains a concern, leading to some downward revisions in growth forecasts by international organizations.

However, these challenges also present opportunities for India to strengthen its position in international trade and manufacturing. By leveraging its comparative advantages in select goods and services, India can enhance its role in global value chains. The government is actively pursuing trade deals and exploring new markets to expand exports.

Long-Term Vision

India aspires to achieve high-income status by 2047, the centenary of its independence. Achieving this vision requires sustaining an average annual growth rate of 7.8% over the next two decades. This necessitates bold and sustained reforms to increase public and private investment, create conducive conditions for job creation, and drive productivity. The government is focused on infrastructure development, job creation, and continued domestic reforms to achieve this long-term growth.