India’s Growing Role in the Global Economy
At the ET World Leaders Forum 2025 in New Delhi, Prime Minister Narendra Modi declared that India is now the world’s fastest-growing major economy, attributing this momentum to a decade of macroeconomic stability. He highlighted key pillars of this success: a narrowing fiscal deficit, strengthened banking sector, controlled inflation, and robust foreign exchange reserves. Additionally, he praised the rise of systematic investment plans (SIPs), with lakhs of domestic investors regularly channeling thousands of crores into the markets.
A Bold Projection: 20% Share in Global Growth
Modi cited expert projections stating that India’s share of global economic growth is poised to reach an unprecedented 20% in the near future.
Continued Rise Toward the Global Top Three
Modi reaffirmed that:
- India is on track to become the world’s third-largest economy very soon, moving from its current position as the fifth-largest.
- This ascent reflects the impact of continuous reforms, investment, and resilience through challenges such as the COVID-19 pandemic.
Strength in Policy and Finance
The Prime Minister credited India’s economic trajectory to:
- Macro-economic stability over the past decade
- A shrinking fiscal deficit (targeted at 4.4%)
- A stronger banking network
- Low inflation and interest rates
- Robust capital markets, supported by household investments via SIPs
- Healthy current account dynamics and amplified forex reserves
He also emphasized forthcoming GST reforms, anticipated to ease business operations, stimulate demand, generate jobs, and improve both ease of living and ease of doing business.
Emphasis on Innovation and Strategic Sectors
Modi briefly pointed to India’s growing capabilities in domains such as:
- Semiconductors and chip manufacturing
- Space ambitions
- Defense production
- General advancement in technology and industry—a theme also highlighted at the forum.
Why This Matters
| Key Aspect | Significance |
|---|
| Global Growth Engine | India emerging as a 20% contributor to global growth underscores its centrality to the global economy. |
| Economic Resilience | The ability to sustain growth through crises reflects India’s strong macroeconomic foundations. |
| Investor Confidence | Record domestic investment via SIPs signals rising financial maturity among households. |
| Reform Momentum | Continued structural changes—from GST to manufacturing and semiconductors—underscore a reform-driven outlook. |
| Strategic Positioning | Becoming the world’s 3rd-largest economy elevates India’s economic and geopolitical stature. |