GDP

India’s ambitious vision of becoming a developed nation by 2047 hinges on sustaining an average nominal GDP growth rate of approximately 10% annually, underscored by current market valuations and economic expansion. Rajiv Memani, newly appointed president of the Confederation of Indian Industry (CII), emphasizes the pivotal role of an impending interim trade agreement with the United States in dispelling market uncertainties and opening expansive opportunities for Indian enterprises, particularly in labour-intensive sectors.

S&P Global Ratings has revised India’s GDP growth projection for FY2026 upward to 6.5%, citing a favorable combination of domestic demand resilience, anticipated monetary easing, and supportive fiscal measures such as income-tax concessions. The revision is also underpinned by assumptions of a normal monsoon and lower global crude oil prices.

Despite ongoing geopolitical volatility in the Middle East, India’s macroeconomic fundamentals remain relatively insulated, according to S&P Global Ratings. The agency noted that lower global energy prices, compared to 2023 levels, are acting as a key stabilizing factor for both inflation and the rupee. While some volatility in currency and current account outflows is possible due to elevated oil prices and global risk aversion, S&P expects average inflation in 2025 to moderate to 4%, with the rupee weakening only marginally.

India's economic momentum is expected to remain robust through the 2025–26 fiscal year, with credit rating agency ICRA projecting real GDP growth to exceed 6.5% and Gross Value Added (GVA) to rise above 6.3%. Buoyed by rural resilience, tax relief, and increasing public investment, the growth outlook remains optimistic despite external challenges such as tepid merchandise exports. Inflation is forecast to stay relatively moderate, and the fiscal deficit is seen narrowing to 4.4% of GDP.

India’s poverty landscape has undergone a remarkable transformation over the past decade, as highlighted in a recent World Bank report. The report shows India’s extreme poverty rate fell dramatically from 27.1% in 2011-12 to just 5.3% in 2022-23, even as the World Bank raised the global poverty threshold to USD 3 per day to reflect inflation-adjusted benchmarks. This recalibration underscores India’s significant strides in poverty alleviation, bolstered by targeted welfare programs and robust economic growth.

India is on the brink of a significant milestone in global economic rankings, with multiple top economists and international organizations affirming its transition into the world’s fourth largest economy. Despite debates around the timing and official classification, both domestic projections and IMF data suggest India’s nominal GDP will surpass Japan’s by the end of 2025. The rapid economic expansion is driven not only by formal sector growth but also by a substantial, under-measured informal economy.

India’s real GDP growth is expected to moderate further to 6.2% in FY26 from 6.5% in FY25, according to a recent forecast by Japanese brokerage Nomura. The report highlights a divergence between tax revenues and other key growth indicators, such as auto sales and credit expansion. Despite the slowdown, equity markets remain resilient, driven by robust domestic fundamentals. Nomura has also revised its March 2026 Nifty target upwards, citing positive macroeconomic signals.

India’s economy exhibited a notable acceleration in the final quarter of FY25, with GDP growth reaching 7.4 percent—the highest in four quarters. Full-year growth stood at 6.5 percent, underscoring the country’s resilience amid a challenging global economic environment. The robust performance was largely attributed to a surge in public capital expenditure and heightened private sector investment activity. Government data released on May 30 suggests a broader economic revival, signaling optimism despite lingering concerns over global headwinds.

India's gross domestic product (GDP) growth for the fourth quarter of FY2024–25 is projected at 6.9%, according to leading credit rating agency ICRA. While this indicates a modest rebound from Q3’s 6.2% growth, it falls significantly short of the 7.6% expansion implied by the National Statistical Office’s (NSO) full-year forecast of 6.5%. ICRA now expects GDP for FY25 to grow by 6.3%—below the government’s estimate—citing weak private consumption, uneven investment activity, and a divergence in export performance.

India’s economic outlook for 2025 has been slightly downgraded to 6.3%, according to a mid-year update from the United Nations. While this marks a decline from the previous estimate of 6.6% and a significant slowdown from the 7.1% growth recorded in 2024, India continues to rank among the fastest-growing large economies. Robust domestic consumption, government-led investment, and resilient services exports are expected to cushion the impact of weakening global trade dynamics and geopolitical uncertainty.