India is projected to secure its place as the world’s fourth largest economy by 2026, overtaking Japan, with a Gross Domestic Product (GDP) growth rate of 6.8% in FY25 and an anticipated 7.7% in FY26. The PHD Chamber of Commerce and Industry (PHDCCI) credits this impressive trajectory to the country’s strong economic resilience and solid macroeconomic foundation.
To further fuel this growth, PHDCCI suggests increasing the income tax exemption threshold to $11,566 and limiting the highest tax rate to incomes exceeding $46,264. These adjustments are expected to enhance disposable income and consumption. Additionally, the industry body anticipates the Reserve Bank of India (RBI) may lower the benchmark interest rate by 25 basis points, given the decline in Consumer Price Index (CPI) inflation.
The chamber recommends a comprehensive five-point plan to drive growth, emphasizing the need for increased capital spending, improved business ease, lower operational costs, greater focus on labor-intensive manufacturing, and deeper engagement in global value chains. These steps are bolstered by India’s proactive reforms and a favorable investment environment, distinguishing its economy from global counterparts experiencing slower progress.
Furthermore, the PHDCCI underscores the importance of prioritizing key sectors such as agriculture, financial technology, semiconductor production, renewable energy, healthcare, and insurance. These industries hold the potential to sustain and amplify India’s economic ascent in the coming years.
