Blitz Bureau
India’s march toward becoming the world’s fourth-largest economy, as projected by the IMF’s latest World Economic Outlook, is a moment of national pride.
This recognition is anchored in real gains: strong domestic consumption, a thriving services sector, digital infrastructure that is the envy of many emerging markets, and a relatively stable macro-economic framework. The Government’s sustained focus on infrastructure, fiscal consolidation, and manufacturing capacity-building has laid the foundation for a more resilient economy. Foreign investor interest remains high, and India’s digital public goods framework — from Aadhaar to UPI — is being studied globally as a model for inclusive innovation.
Amid the ongoing US-China trade tensions, investors are increasingly turning to India as a safer and more promising destination. An April 2025 Bank of America survey shows that 42 per cent of Asia-Pacific fund managers are now overweight on Indian equities, versus 39 per cent for Japan and 6 per cent for China.
The country remains in the global economic spotlight: GDP growth estimates exceed 6 per cent for 2025, with inflation hovering around 4 per cent – reflecting one of the world’s highest growth rates alongside moderate price pressures. This strong footing is supported by a large domestic market and rising manufacturing investment, driven by Government initiatives, such as the Production-Linked Incentive (PLI) scheme.
India’s economic fundamentals cushion it against external shocks – strong growth, large forex reserves, and a diversified economy make it more robust than many emerging peers. Even during recent episodes of global banking turbulence and inflationary spikes, Indian equities and the rupee remained steadier than expected, supported by India’s domestic growth engine and sound monetary management.
But the real challenge remains transforming size into quality — growth that is sustainable, inclusive, and job-rich. A fourth-place global ranking should not obscure the country’s need for deeper investments in health, education, environmental sustainability, and judicial efficiency. Nor should it delay reforms in land, labour, and governance that are critical to long-term competitiveness.
Our external environment remains volatile. Geopolitical realignments, supply chain disruptions, and oil price spikes can derail fiscal planning and affect inflation-sensitive segments. Add to this, the underappreciated risks of climate change, water stress, and urban air pollution — which, if left unaddressed, could undermine both economic productivity and social stability. Rising climate volatility also threatens food security and livelihoods, particularly in India’s agrarian belts.
India’s climb up the economic ladder must be measured not just by how high it reaches, but by how broadly it uplifts. The fourth-largest economy tag will be truly meaningful only if it reflects shared prosperity, not just aggregate expansion.