India is expected to sustain its position as the world’s fastest-growing major economy, with the International Monetary Fund (IMF) forecasting a 6.5% Gross Domestic Product (GDP) growth rate for the fiscal year 2025-26. This expansion is attributed to strong private sector investment and stable macroeconomic conditions. Additionally, India’s second advance estimate for 2024-25 also projects a similar 6.5% growth, while inflation is likely to stabilize as food prices moderate. According to the IMF’s Article IV consultation, India’s robust economic momentum provides a strategic window to implement key structural reforms, supporting its long-term ambition of achieving advanced economy status by 2047.
The IMF underscored the importance of deeper reforms to strengthen private investment, create jobs, and accelerate economic growth. Key focus areas include labor market improvements, investment in human capital, and increasing women’s participation in the workforce. To attract greater Foreign Direct Investment (FDI) and bolster private sector engagement, India will need to ensure stable policy frameworks, governance enhancements, trade liberalization, and a more business-friendly environment.
Despite a recent slowdown, India’s financial sector remains resilient, with non-performing loans reaching historic lows. Fiscal consolidation efforts are progressing, and the current account deficit remains under control, supported by strong service exports. These factors position India as a key player in the global economy, reinforcing its growth trajectory in the coming years.
