With inflation under control, exports at record highs, and robust rural indicators, India’s economy appears firmly on a growth path. Check latest macroeconomic indicators:
Prime Minister Narendra Modi on Saturday said India is on its way to become the third-largest economy in the world and, therefore, must remain “vigilant” about its economic interests. The remarks have come days after Morgan Stanley in its report also said India is on track to become the third-largest economy by 2028 and more than double its GDP to $10.6 trillion by 2035.
Addressing a public rally in Varanasi, the prime minister said: “India is set to become the world’s third-largest economy… therefore, India must remain vigilant about its economic interests. Our farmers, our small industries, employment for our youth… their interests are paramount for us. The government is making every effort in this direction.”
India’s Latest Macroeconomic Indicators
With inflation under control, exports at record highs, and robust rural indicators, India’s economy appears firmly on a growth path. Here’s a look at India’s current macroeconomic situation:
GST Collection: The latest goods and services tax (GST) data released on Friday showed a 7.5% YoY in tax collection to Rs 1,95,735 crore. With this, collections remained above Rs 1.8 lakh crore for a seventh consecutive month. In April-July 2025, the collection has grown 10.7 per cent year-on-year to Rs 8,18,009 crore.
Inflation: Inflation has eased considerably, bringing relief to households. The Consumer Price Index (CPI) inflation dropped to 2.10% in June 2025, its lowest level since January 2019, and well within the Reserve Bank of India’s (RBI) target range of 4% (±2%). This drop was aided by a favourable base effect and a sharp fall in food inflation, which stood at -1.06% year-on-year. Prices for essential food items such as vegetables, cereals, pulses, sugar, milk, and spices saw notable corrections, helping reduce household expenditure.
Wholesale inflation also reflected the cooling price trend. The Wholesale Price Index (WPI) slipped to -0.13% in June, with the WPI Food Index inflation at -0.26%, largely due to lower prices of mineral oils, crude oil, natural gas, and basic metals.
Rural Economy: In rural India, economic indicators are improving as well. According to NABARD’s Rural Economic Conditions and Sentiments Survey (RECSS) for July 2025, 76.6% of rural households reported increased consumption, while 39.6% experienced higher incomes over the past year. Rural inflation fell to 1.72% in June, a sharp 394 basis point drop compared to the previous year, signalling better supply-side management and job creation in non-urban areas.
FMCG major Hindustan Unilever (HUVR) in its post-Q1 management concall highlighted that rural-led recovery remains intact, with urban demand also picking up. Growth is being driven by smaller towns and channels like e-commerce and quick commerce. HUVR’s rural business comprises nearly 1/3 of its overall portfolio.
The RBI’s repo rate cut to 5.5% in January 2025, from 6.5%, has helped lower borrowing costs, thereby supporting both consumption and investment without risking inflationary pressure.
External Front: India’s exports rose to $210.31 billion in Q1 FY 2025-26 (April-June 2025), marking a 5.94% year-on-year increase, while imports grew by 4.38%. This helped narrow the trade deficit by 9.4% to $20.31 billion. Services exports surged 10.93% to $98.13 billion, while non-petroleum exports grew 5.98%, and non-gem and jewellery exports rose 7.23%, signalling broad-based strength across export categories.
Key sectors driving the export growth include electronic goods, tea, meat, dairy, poultry, jute manufacturing, and cereals. Electronics exports received a boost from the Make in India initiative, while the Mission for Aatmanirbharta in Pulses helped reduce reliance on imports.
For FY 2024-25, India achieved a record total export figure of $824.9 billion, a 6.01% increase over the previous fiscal year, reinforcing its growing presence in global trade.
Govt Schemes: Government policies continue to drive this export momentum. Programmes like the Foreign Trade Policy (FTP) 2023, RoDTEP, RoSCTL, and Districts as Export Hubs are enhancing competitiveness. Infrastructure expansion under the National Logistics Policy and PM GatiShakti, along with increased budget outlays for Production-Linked Incentive (PLI) schemes in electronics, automobiles, and textiles, are fueling industrial growth.
Initiatives such as Bharat Mart in Dubai are helping MSMEs reach global markets. Compliance reforms, including the decriminalisation of over 3,700 legal provisions since 2014, and platforms like the National Single Window System, are further simplifying business operations. The Ministry of MSME’s 65 Export Facilitation Centres are also playing a key role in enabling small businesses to scale internationally.
India’s real GDP grew by 6.5% in FY 2024-25, according to the Ministry of Statistics and Programme Implementation, with the RBI projecting similar growth for FY 2025-26. With this, India remains the fastest-growing major economy in the world. Looking ahead, India is expected to reach a GDP of $7.3 trillion by 2030, positioning itself as the third-largest economy globally, supported by its young population, strong domestic demand, and ongoing structural reforms.
