India’s economic story has been nothing short of transformational. In FY25, the country officially became the fourth-largest economy in the world and is on track to reach the third position by 2030-31, with a projected GDP of USD 7.3 trillion. This ascent is underpinned by a decade of macro stability, governance reforms, and resilient domestic demand.
From USD 1.23 trillion in FY15 to USD 3.82 trillion in FY25, India’s GDP has tripled in just ten years. In FY25 alone, the nominal GDP increased by 9.9%, while the real GDP grew by 6.5%. These figures represent more than just growth; they reflect India’s structural transformation across agriculture, industry, and services.
Macroeconomic Strength: A Stable Foundation for Growth
India’s economic environment in FY25–26 has been marked by macroeconomic resilience and fiscal prudence. Inflation has cooled, trade volumes are robust, and the country continues to attract record capital investment.
Key macroeconomic highlights:
- CPI (Consumer Price Index) inflation fell to 2.10% in June 2025, from 5.08% in June 2024—the lowest since January 2019.
- Private Final Consumption Expenditure (PFCE) grew by 7.2% in FY25, up from 5.6% in FY24.
- India’s foreign exchange reserves stood at USD 692.56 billion as of July 11, 2025.
- Rupee strength improved, reaching ₹86.37/USD on July 23, 2025.
- Bank credit stood at ₹1,84,83,098 crore (USD 2.14 trillion) as of June 27, 2025.
These indicators underscore India’s capacity to manage inflation, stimulate consumption, and maintain monetary stability, a compelling combination for global investors and trade partners.
Trade and Exports: Powering India’s Global Footprint
India’s export performance continues to strengthen its position as a credible player in global trade. In FY25, total exports surged to USD 825 billion, up from USD 468 billion in FY14, reflecting a 76% growth over the decade. The country’s merchandise exports share rose from 1.66% to 1.81%, moving it up three places to the 17th spot globally.
Trade data from June 2025 reinforces this momentum:
- Merchandise exports: ₹3,03,469 crore (USD 35.14 billion)
- Merchandise imports: ₹4,65,653 crore (USD 53.92 billion)
- Gross GST revenue: ₹1,84,597 crore (USD 21.38 billion)
- Railway freight traffic: 1.6 billion tonnes in FY25
- Cargo traffic at major ports: 220.04 million tonnes (April–June FY26)
India’s narrowing trade deficit and booming services sector are expected to further reduce the current account deficit, enhancing external stability.
Manufacturing, Infrastructure & Consumption Growth
The Indian government’s continued focus on infrastructure and domestic production is evident in its Union Budget 2025–26, which increased capital expenditure by 10.1% to ₹11.21 lakh crore (USD 129 billion). This move boosts long-term growth and job creation across the country.
Production, transportation, and industrial activity also reflect positive momentum:
- Foodgrain production reached 3,539.59 LMT, growing by 6.5% over FY24.
- Index of Industrial Production (IIP) for May 2025: 156.6 (vs. 154.7 in May 2024)
- Core Industries Index (April–June FY26): 166.7 (vs. 164.5 same period FY25)
- Petroleum product consumption (Q1 FY26): 61.837 MMT
High domestic demand is further reflected in the UPI transaction volume, which reached 14 billion transactions worth ₹18.41 lakh crore (USD 213.27 billion) in May 2025. Moreover, e-way bills generated in June 2025 jumped 19.3% year-on-year to 11.94 crore, indicating a spike in goods movement across the country.
Employment, Digitalization, and Investment Surge
India’s labor market showed signs of recovery in 2025, with an 8.9% increase in job listings during May, ending an eight-month slowdown. Growth was most prominent in sectors like childcare, education, personal care, and manufacturing.
Digital infrastructure is playing a pivotal role in India’s economic transformation. From UPI transactions to GST compliance and e-invoicing, digital penetration continues to reduce friction in trade and improve transparency.
Private investment momentum has also stayed strong:
- Private equity and venture capital (PE/VC) investments in Q2 2025 stood at ₹45,771 crore (USD 5.3 billion) across 248 deals.
- In June alone, PE/VC investments totaled ₹14,681 crore (USD 1.7 billion).
- Notable sectors attracting capital include fintech, logistics, EV, education, and deep tech.
Agriculture, Budget Priorities, and Inclusive Development
The 2025–26 Union Budget, themed “Sabka Vikas,” lays a strong foundation for equitable and sustainable growth. With a strategic focus on agriculture, MSMEs, youth, and innovation, the budget proposes:
- Prime Minister Dhan-Dhaanya Krishi Yojana for agri-reform and productivity
- Expanded support for first-time entrepreneurs
- 50,000 Atal Tinkering Labs to boost STEM education
- Incentives for domestic manufacturing through customs duty rationalization
This people-centric approach aligns with India’s vision of building a middle-income economy with robust social infrastructure, inclusive access, and digital empowerment.
Service Sector Resilience and Sectoral Momentum
India’s service sector continues to be a key growth driver. The Services PMI touched 61.1 in July 2025, reflecting steady expansion due to rising demand and favorable output conditions. Healthcare, education, logistics, and tourism are poised for sustained growth in FY26.
Additional indicators show broad-based momentum:
- June 2025 crude oil basket: ₹6,082 (USD 70.38) per barrel
- Currency in circulation (CIC): ₹37.86 lakh crore (USD 438.45 billion)
- Liquidity Adjustment Facility (LAF) daily net injection: ₹47,294 crore (USD 5.50 billion)
India’s banking and financial services sector is expected to flourish further with rising consumer credit, digital inclusion, and improved banking penetration in rural regions.
India’s Economic Growth: A Path to Global Leadership
India’s journey from the 10th to the 4th-largest economy within a decade underscores the scale of its transformation. With strong macro fundamentals, robust export growth, rising capital expenditure, and a youthful demographic profile, India is uniquely positioned for sustained growth over the next two decades.
By prioritizing structural reforms, digital infrastructure, human capital development, and global trade alignment, India is creating the framework to become not just a regional powerhouse, but a global economic leader by 2030 and beyond.
At Hmsa, we offer specialized advisory services tailored to help businesses and investors tap into India’s economic growth. Our team provides end-to-end Strategy Planning support across a wide range of high-potential sectors, including infrastructure, manufacturing, energy, semiconductors, digital services, MSMEs, exports, agribusiness, financial services, and mobility. Whether you’re planning market entry, seeking policy alignment, optimizing operations, or scaling investments, we deliver data-backed insights and execution-ready strategies to unlock your full growth potential in India’s economic landscape.
Reference: India Brand Equity Foundation
