Blitz Bureau
INDIA’S economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. In 2024–25, the country’s real GDP growth was estimated at 6.5 per cent. The Reserve Bank of India expects the same rate to continue in 2025–26.
This performance comes at a time when the global economy faces uncertainty, making India’s steady momentum all the more significant. Supported by strong domestic demand, easing inflation, robust capital markets and rising exports, the broader economic picture is one of resilience and balance.
India’s growth story continues to draw global attention, backed by strong fundamentals and consistent performance. Real GDP, which measures the economy’s output after removing the effects of inflation, expanded by 6.5 per cent in 2024–25.
Domestic demand
This sustained performance is being driven by strong domestic demand. Rural consumption has picked up, city spending is rising, and private investment is on the upswing. Businesses are expanding capacity, with many operating near their maximum output levels.
At the same time, public investment remains high, especially in infrastructure, while stable borrowing conditions are helping firms and consumers make forwardlooking decisions. Global conditions, by contrast, remain fragile.
Over the past decade, India’s economic size has expanded sharply. In 2014–15, the GDP at current prices was Rs 106.57 lakh crore. This figure is expected to rise to Rs 331.03 lakh crore in 2024–25, nearly tripling in ten years.
Inflation in India has eased sharply, offering relief to both households and businesses. In May 2025, the year-on-year inflation rate based on the Consumer Price Index (CPI) stood at 2.82 per cent. This marks the lowest level since February 2019. It also reflects a drop of 34 basis points from the previous month.
Food prices, which often have a big impact on overall inflation, have also cooled. The Consumer Food Price Index (CFPI) recorded an inflation rate of just 0.99 per cent in May 2025. According to RBI’s Financial Stability Report released in June 2025, the outlook for inflation remains favourable.
India’s capital markets are booming, and the confidence is visible. They have become a powerful engine for economic growth by turning household savings into investments.
Strong external sector
India’s external sector continues to provide a strong cushion for the economy. With rising foreign exchange reserves, a manageable current account balance, and steady inflows of foreign investment, India is well placed to deal with global uncertainties. India continues to be a top choice for global investors. FDI inflows rose to a $81.04 billion (provisional) in FY 2024–25, marking a 14 per cent increase from $71.28 billion in FY 2023–24.
The country’s foreign exchange reserves stood at $697.9 billion as of June 20, 2025. These reserves are enough to cover more than 11 months of goods imports, providing a safety net in times of global shocks. This means that even if exports slow down, India has enough foreign currency to pay for essential imports.
India’s current account balance recorded a surplus of $13.5 billion (1.3 per cent of GDP) in Q4:2024–25, compared with $4.6 billion (0.5 per cent of GDP) in the same quarter of the previous year.
Export performance
India’s export perfo3rmance continues to reflect the growing strength of its economy, particularly in services and high-value manufacturing. Over the past decade, the country has steadily expanded its footprint in global trade. India’s total exports touched a new high of $824.9 billion in 2024–25, growing by 6.01 per cent from $778.1 billion in 2023–24. This marks a sharp rise from $466.22 billion in 2013–14, underlining a decade of sustained export momentum.
Services exports remain a key contributor. In 2024–25, India exported $387.5 billion worth of services, a 13.6 per cent increase over the previous year’s $341.1 billion. Merchandise exports, excluding petroleum products, also achieved a record. In 2024–25, reaching $374.1 billion, growing by 6.0 per cent from $352.9 billion in the previous year.
Underlying this export growth is the steady rise in manufacturing. The Gross Value Added (GVA) of manufacturing at constant prices rose from R 15.6 lakh crore in 2013–14 to Rs 27.5 lakh crore in 2023–24. India’s economic performance over the past year reflects not just growth, but a deeper sense of stability and direction.
