Daijiworld Media Network - New Delhi

New Delhi, Jul 6: India's economic momentum continues to impress on the global stage, with the nation’s GDP tripling over the past decade and inflation dipping to its lowest level in six years, according to official figures released on Sunday.

The size of the Indian economy has expanded from ?106.57 lakh crore to ?331.03 lakh crore in 2024–25, marking a significant milestone. For the current fiscal, GDP growth has been recorded at 6.5%, with forecasts indicating continued stability and strength.

The Reserve Bank of India (RBI) anticipates a similar growth trajectory for 2025–26, while international bodies have echoed the upbeat sentiment. The United Nations projects India’s GDP to grow by 6.3% in 2025 and 6.4% in 2026, whereas the Confederation of Indian Industry (CII) places its expectations slightly higher at 6.4–6.7%.

Drivers of Growth: Demand, Investment, and Stability

This sustained expansion is largely powered by strong domestic demand. Rural spending has revived, urban consumption is rising, and private investment is picking up pace, with many industries nearing full capacity. At the same time, public sector investments, particularly in infrastructure, remain robust. Stable borrowing conditions have also encouraged both consumers and businesses to plan for the future with greater confidence.

Meanwhile, the global economic landscape presents a stark contrast. The UN has described the world economy as being at a “precarious moment”, plagued by trade tensions, policy uncertainty, and shrinking cross-border investments. Against this fragile backdrop, India continues to stand out as a beacon of stability and resilience.

Inflation Drops Sharply, Offering Relief

Adding to the positive outlook, inflation has eased significantly. In May 2025, India’s Consumer Price Index (CPI) inflation dropped to 2.82% year-on-year—the lowest level since February 2019 and 34 basis points lower than the previous month.

A major contributor to this decline is the steep drop in food inflation. The Consumer Food Price Index (CFPI) showed an inflation rate of just 0.99%, its lowest since October 2021. Rural and urban food inflation were nearly identical, at 0.95% and 0.96%, respectively. Essential commodities like vegetables and grains saw notable price reductions.

The RBI is optimistic that inflation will remain aligned with its medium-term target of 4%, and may even dip slightly below that in the near term.

Stock Market Confidence Reflects Economic Optimism

India’s capital markets have also played a vital role in reinforcing the growth narrative. Stock markets saw robust performance through December 2024, outpacing many other emerging economies, despite global headwinds and domestic uncertainties. The buoyant sentiment among both domestic and international investors reflects a high level of confidence in India’s long-term economic prospects.

With inflation under control, strong internal demand, a resilient financial system, and expanding investments, India remains one of the world’s most promising economic stories in 2025.