India’s Growth Story Holds Firm Despite Global Headwinds: Economic Survey

Finance Minister Nirmala Sitharaman on Thursday tabled the Economic Survey 2025–26 in Parliament, painting an upbeat picture of India’s economy even as global uncertainty continues to loom.

The Survey said India remains the fastest-growing major economy, with real GDP growth for 2025–26 estimated at 7.4 per cent, while Gross Value Added (GVA) growth is pegged at 7.3 per cent. Looking ahead, India’s potential growth rate is estimated at around 7 per cent, with GDP growth in 2026–27 projected between 6.8 and 7.2 per cent.

Despite global headwinds such as geopolitical tensions and trade disruptions, the Survey noted that India’s economic performance stands out due to strong domestic demand, stable employment and controlled inflation. Household spending has remained robust, supported by low prices and rising purchasing power, while both rural and urban consumption have shown steady improvement.

The Survey highlighted a strengthening investment climate, with capital formation growing steadily and public spending continuing to drive infrastructure expansion. Manufacturing activity has gained momentum, showing clear signs of recovery, while the services sector remains the biggest engine of growth, contributing more than half of India’s GDP.

India’s fiscal position has also improved. The Centre’s revenue receipts rose to 9.2 per cent of GDP in 2024–25, while better tax compliance and technology-driven reforms helped widen the tax base. Government debt levels have declined since 2020, even as public investment has remained high.

The banking sector recorded a major turnaround, with bad loans falling to a multi-decade low of 2.2 per cent by September 2025. Financial inclusion continued to deepen, with over 55 crore Jan Dhan accounts opened so far and a sharp rise in retail investors, nearly a quarter of whom are women.

On the external front, India’s exports touched record levels, led by strong growth in services. The country remained the world’s largest recipient of remittances, while foreign exchange reserves climbed to over USD 700 billion, providing a strong cushion against global shocks.

Inflation remained under control, averaging just 1.7 per cent between April and December 2025, the lowest since the consumer price index series began. Good monsoon conditions also boosted agriculture, with foodgrain production hitting a record high.

The Survey also flagged major gains in infrastructure, renewable energy, digital connectivity, education and health. India is now the world’s third-largest domestic aviation market, ranks among the global leaders in renewable energy, and has made sharp progress in reducing poverty, maternal mortality and child deaths.

Summing up, the Economic Survey said India is steadily moving from recovery to sustained growth, backed by reforms, infrastructure push and a stable macroeconomic framework. With strong fundamentals and rising global confidence, the Survey said the country is well placed to pursue its long-term vision of becoming a developed nation by 2047.

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