• Throughout history, civilizations have often faced moments of great crisis that test their resilience and capacity for renewal. India, drawing on the wisdom embedded in its cultural narrative, has long embraced the idea that struggle is a precursor to success. This notion parallels the mythological event of Samudra Manthan—the churning of the ocean—where turbulent upheaval ultimately yielded nectar. Similarly, India’s economic transformations have repeatedly followed periods of challenge, leading to revival and growth. From the economic liberalization of 1991, which emerged as a response to a severe crisis, to the surge in digital adoption propelled by the COVID-19 pandemic, adversity has consistently acted as a catalyst for resilience and progress.
• In the present day, despite some sceptics declaring India’s economy as stagnant or “dead,” the actual data paints a markedly different picture—one of rapid expansion, improved economic buffers, and widening inclusivity in opportunity.

Features of India’s Economic Growth

• India’s growth story is resilient and broad-based. Recent GDP figures underscore an economy firmly on stable footing. In the first quarter of the fiscal year 2025-26, real GDP grew by 7.8%, marking the strongest performance in five quarters. This growth is spread widely across key sectors: manufacturing expanded by 7.7%, construction by 7.6%, and services surged by 9.3%. Nominal GDP also increased by 8.8%, supported by robust consumption, heightened investment, and reform-driven improvements in logistics that reduce costs and boost efficiency.
• India has now ascended to become the world’s fourth-largest economy and remains the fastest-growing among major economies, outpacing even the United States and China in growth rates. If current trends persist, India is projected to surpass Germany before the decade concludes, thereby securing its place as the world’s third-largest economy in terms of market exchange value.
• This trajectory has earned recognition from global financial institutions. Notably, S&P Global recently upgraded India’s sovereign credit rating for the first time in 18 years. This upgrade acknowledges India’s fiscal discipline, monetary credibility, and sustained growth momentum. Beyond reducing borrowing costs, this rating upgrade directly counters narratives that suggest India’s economy is stagnating or faltering.

Growth With Inclusion

• India’s growth is not merely about numbers but about the breadth of social impact. Between 2013-14 and 2022-23, nearly 250 million Indians have moved out of multidimensional poverty. This transformation is built on extensive delivery of essential services such as universal access to bank accounts, clean cooking fuel, healthcare coverage, reliable tap water, and direct benefit transfers.
• Such interventions empower households to make independent economic decisions, fostering self-reliance. Unlike rapid growth models reliant on authoritarian methods, India’s democratic approach emphasizes consensus-building, competitive federalism, and dependable last-mile delivery—achieved through a robust digital public infrastructure. This approach frames India’s economy as a marathoner’s journey—steady, enduring, and designed for lasting success.

Crucial Factors Driving India’s Economic Growth

1.     Energy Security as a Growth Enabler: India ranks as the third-largest consumer of energy globally and is the fourth-largest refiner and importer of liquefied natural gas (LNG). The country has developed a substantial refining capacity of 5.2 million barrels per day, with ambitious plans to expand further by the end of this decade. Given the forecast that India’s energy demand will double by 2047, the nation’s role will be pivotal in maintaining global energy stability, representing nearly one-quarter of the expected incremental demand worldwide. Government reforms have expanded exploration acreage, opened previously restricted basins, and introduced transparent, competitive bidding through the Open Acreage Licensing Policy. Pricing reforms, particularly in the natural gas sector, have encouraged further investment. Incentives like premium payments for deepwater projects reflect a balanced strategy that marries energy security with innovation.

2.     Transitioning to a Green Future: India’s commitment to cleaner energy is demonstrated by the rise in ethanol blending from a mere 1.5% in 2014 to 20% today, a shift that has significantly saved foreign exchange while directly benefiting farmers. The deployment of compressed biogas plants, mandated blending programs, and investments in emerging technologies such as green hydrogen showcase India’s ambition to lead the clean energy transition. Criticism of India’s continued purchase of Russian crude oil often overlooks the legality and necessity of these imports. Unlike crude from Iran or Venezuela, Russian oil is not subject to outright sanctions but instead falls under a price cap regime designed to maintain global supply. India’s adherence to these rules has helped stabilize global oil markets, preventing potential price spikes that might have exceeded $200 per barrel. Rather than profiting from the situation, India’s longstanding refining and export practices have contributed to supply chain stability, even supporting European markets. Domestically, government subsidies, tax reductions, and mandatory supply quotas have shielded Indian consumers from volatile price fluctuations, reflecting the state’s duty to protect its citizens.

Industrial and Digital Transformation

• Supported by production-linked incentives and infrastructure upgrades under the Pradhan Mantri Gati Shakti initiative, key sectors such as semiconductors, defense, electronics, and renewable energy are rapidly scaling. The recent approval of four new semiconductor projects under the India Semiconductor Mission, alongside renewed Japanese investment, signals a strategic push to build resilient technology supply chains.
• The digital economy amplifies these gains further. With globally leading digital payment systems like UPI and a thriving startup ecosystem, India is not only exporting goods but also digital solutions. The integration of digital platforms with physical infrastructure creates a multiplying effect—reducing friction, enhancing productivity, fostering formalisation, and sustaining investment and consumption cycles.

Conclusion

• Independent projections suggest that by 2038, India could emerge as the world’s second-largest economy by purchasing power parity, with a GDP exceeding $34 trillion. Achieving this ambitious trajectory will require continued reforms, robust human capital development, and abundant access to clean energy.
• India’s history teaches that every period of doubt and challenge has been followed by transformative breakthroughs—whether the Green Revolution, the IT revolution, or the digital revolution. In this context, the current economic churn is poised once again to yield the nectar of growth and renewal.