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India’s economy in Purchasing Power Parity terms now stands at $15 trillion—more than half the size of the United States economy
CPI inflation is projected to average 4.8 per cent in FY25, with a further decline to 4.2 per cent anticipated in FY26.
India’s economy is poised for robust growth in the financial year 2025–26, with the Reserve Bank of India (RBI) projecting a real GDP expansion of 6.7 per cent. Backed by solid domestic demand, high capital expenditure, and improved agricultural prospects, the country continues to cement its position as one of the world’s fastest-growing major economies.
According to a report published in The Hindu Business Line, the RBI’s quarterly GDP growth forecasts for FY26 stand at 6.7 per cent for Q1, 7.0 per cent for Q2, and 6.5 per cent each for Q3 and Q4. The central bank attributes this optimism to strong Rabi crop output, healthy reservoir levels, and a continuing recovery in manufacturing and services.
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The inflation outlook is also improving. CPI inflation is projected to average 4.8 per cent in FY25, with a further decline to 4.2 per cent anticipated in FY26. This moderation is expected due to easing food prices and effective monetary policy actions, helping maintain consumer purchasing power and support macroeconomic stability.
A key contributor to this positive outlook is the rebound in household financial savings, which had declined in previous years. A Business Standard report notes that these savings have started to improve, reflecting increased disposable incomes and more prudent financial behaviour among Indian households. This resurgence in savings is likely to support consumption-led growth and provide a buffer against future economic shocks.
On the global stage, India’s economic footprint continues to grow. As highlighted by NITI Aayog Vice-Chairman Suman Bery, India’s economy in Purchasing Power Parity (PPP) terms now stands at $15 trillion—more than half the size of the United States economy. “This is a remarkable indicator of the real economic weight India holds globally,” Bery was quoted as saying.
Additionally, Foreign Direct Investment (FDI) is providing a crucial boost. FDI inflows reached $81 billion in FY25—the highest in the last three years—according to Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh, as reported by Business Standard. This surge highlights renewed investor confidence in India’s long-term growth story, especially in sectors like manufacturing, renewable energy, and digital infrastructure.
This confidence in India’s growth trajectory was shared by Chief Economic Adviser V Anantha Nageswaran at the Confederation of Indian Industry’s (CII) Annual Business Summit. Speaking to Mint, he emphasised that India’s growth continues to be broad-based and supported by structural reforms and resilient macroeconomic fundamentals.
Nageswaran advised Indian industry to be prepared to deal with a stronger currency in the coming years by becoming more competitive through productivity improvements.
From rising household savings to growing global stature and strong FDI flows, India’s economic momentum appears not only sustained but also accelerating. With supportive fiscal policies, robust agricultural performance, and growing investor interest, FY26 could mark another milestone in India’s journey toward becoming a global economic powerhouse.
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News business India’s Economy Set For Strong FY26 Growth With Push In Global Economic Standing