India, the world’s fourth-largest economy has emerged as the fastest-growing major economy and is on track to become the world’s third-largest economy with a projected GDP of $7.3 trillion by 2030. This transformation is the result of:
- Decisive governance;
- Visionary reforms, and;
- Global engagement under Prime Minister Narendra Modi.
Driven by robust domestic demand, a dynamic demographic profile, and sustained economic reforms, India is asserting its rising influence in:
- Global trade;
- Investment, and;
- Innovation.
A statement by renowned economist Jagdish Bhagwati is worth noting in this respect. He states that, while in the old days the World Bank used to tell India what to do, now, India tells the World Bank what to do, powerfully reflecting India’s shift from a dependent economy to a self-reliant, globally competitive powerhouse.
At the core of this transformation is the vision of Aatmanirbhar Bharat, a movement that promotes:
- Innovation;
- Entrepreneurship, and;
- Technological sovereignty.
Under PM Narendra Modi’s leadership, strategic initiatives like the Production Linked Incentive (PLI) schemes, revitalisation of MSMEs, and the expansion of digital infrastructure have laid the foundation for a high-growth, high-opportunity economy.
A vision of inclusive and equitable growth
This however, has led, not only the foundation for a high-growth, high-opportunity economy, but has ensured inclusive and equitable growth, with the government’s policies having been focused on:
- Job creation;
- Support for small businesses;
- Increased public investment, and;
- Financial empowerment of the middle class and entrepreneurs.
This has ensured that economic progress benefits every citizen.
PM Modi’s vision of India
India’s economic growth under Prime Minister Narendra Modi is not just about building momentum, but about reshaping the Nation’s economic destiny. Under his visionary leadership, India today is a nation, that is:
- Digital;
- Green;
- Aspirational, and;
- Future-ready.
Under PM Modi’s visionary leadership, the country is firmly advancing towards its goal of becoming a global leader.
Transformation of the Economy from 2014-15 to 2024-25
1. GDP Growth: Strengthening the Economic Foundation
India’s GDP has witnessed a remarkable transformation since 2014. At current prices, GDP has increased from Rs. 106.57 lakh Crore in 2014–15 to an estimated Rs. 331.03 lakh Crore in 2024–25, amounting to 210.06 % increase.
In 2024–25 alone, Nominal GDP, measuring the country’s total production at current prices not being adjusted for inflation, grew by 9.9% over the previous year, while Real GDP, an inflation-adjusted measure that reflects the value of all goods and services produced in a given year at constant prices, increased by 6.5%, reflecting sustained economic momentum, this steep growth reflecting the country’s expanding economic base, and rising income levels.
During the same period, Real GVA (Gross Value Added), measuring the contribution of producers, industry, sector, or region to an economy, rose by 6.4% and Nominal GVA, measured by the value of goods and services at current market prices rose by 9.5%.
Private Final Consumption Expenditure (PFCE) grew by 7.3%, driven by a recovery in rural demand, reaching its highest share of GDP (61.8%) since 2002–03.
The services sector has remained the steadiest contributor to GVA with its share rising from 50.6% in FY 2014 to around 55% in FY 2025. The services sector also provides employment to approximately 30% of the workforce.
In addition to its direct contribution, services play an increasingly vital role in servicification of manufacturing, enhancing value through services used in both production and post-production stages, Servicification referring to, the transition of products or industries toward a service-oriented model.
Gross domestic product (GDP) measures the value of all the goods and services produced in a country, while Gross value added (GVA) is the value added to other (purchased) goods and services, which are used to produce within an economy.
This sustained momentum is the result of a structural transformation led by the Government prioritising:
- Transparency;
- Ease of doing business, and;
- Long-term investments across manufacturing, MSMEs, digital services, and infrastructure.
2. External Trade:
India’s Global Footprint has expanded with its total exports showing remarkable growth, rising from US$ 468 billion in 2013–14 to US$ 825 billion in 2024–25, marking a substantial increase amounting to 76.3 % increase.
This growth was supported by a marginal increase in merchandise exports at US$ 437.42 billion in FY 2024–25 compared to US$ 437.07 billion in the previous year, reflecting stability in goods-based trade.
Over the 11 years, merchandise exports rose from US$ 310 billion in 2013–14 to US$ 437.42 billion in 2024–25, amounting to a 41.10 % increase, driven by sectors such as engineering goods, petroleum products, and electronics.
Services exports more than doubled, expanding from US$ 158 billion in 2013–14 to US$ 387 billion in 2024–25 amounting to 144.9 % increase, registering a remarkable growth.
Global Capital Flows into India
India has rapidly become one of the world’s most attractive destinations for Foreign Direct Investment (FDI), the country during the 11 years undertaking:
- Structural reforms;
- Following Investor-friendly policies, leading to;
- Enhanced global competitiveness.
Strengthened by improvements in key international rankings and strategic initiatives, Investor confidence has surged. The Government now aims to raise annual FDI inflows to US$ 100 billion up from the current five-year average of over US$ 70 billion, aligning with the aim to position India as a global investment hub amid shifting supply chains.
These factors have boosted FDI investments in India with Cumulative inflows reaching an impressive Rs. 89.85 lakh Crore (US$ 1.05 trillion) between April 2000 and December 2024, marking nearly a 20-fold increase since FY 2001. India’s FDI equity inflows for April-December 2024 surged by 27% to Rs. 3.40 lakh Crore (US$ 40.67 billion) reflecting robust investor confidence, the growth having been driven by reforms such as:
- The liberalisation of FDI norms in key sectors;
- Introduction of GST, and;
- Initiatives like Make in India.
Disclaimer
Views expressed above are the author’s own.
