India’s economy is growing beating analyst expectations. Currently the world’s fourth-largest economy, India is on track to become the third-largest by 2030 with a projected $7.3 trillion GDP. This momentum is powered by decisive governance, visionary reforms, and active global engagement. Notably, growth is accelerating, with real GDP expected to rise by 7.8% in Q1 FY 2025-26, up from 6.5% a year earlier.

The ascent is powered by strong domestic demand and transformative policy reforms, making India a prime destination for global capital. With easing inflation, higher employment, and buoyant consumer sentiment, private consumption is expected to further drive GDP growth in the coming months.

GDP growth in a country like India is naturally higher than GDP growth of an advanced economy like US, Germany or Japan. However, if we compare India’s growth with other emerging countries, we see that New Delhi has had much higher growth over the last 10 years, as can be seen in the chart below.

An element not to be overlooked concerns India’s ability to attract foreign businesses and qualified resources. Investments in training and workforce development have improved India’s attractiveness to global businesses. Initiatives like “Skill India” have trained millions of workers, making them internationally competitive. Working conditions for the best-trained individuals have improved so much that it has increased the country’s attractiveness for new talent.

When discussing openness to foreign trade, it is essential to analyze inward Foreign Direct Investment (FDI). According to economic theory, inward FDI plays a crucial role in supporting economic growth, thanks to the contribution of capital, advanced technologies, and managerial skills. Since 2000, India has seen a significant increase in FDI inflows. Especially, in 2020, FDI inflows peaked at nearly USD 70 billion, confirming India’s strong attractiveness to foreign investors.

In the energy sector, India was a pollution haven until a few years ago. A case in point is Alang, home to Asia’s largest shipbreaking yard, which has never been known for its ethical demolition practices. India has currently invested heavily in the green transition, so much so that it has seen a boom in renewable energy: a 46% increase in the mix and 90 GW of solar capacity.

In terms of technology and innovation, India has been on a remarkable upward trajectory, as evidenced by its climb from 81st to 40th position in the Global Innovation Index between 2015 and 2022. This progress is fueled by increased investment in research and development, a flourishing startup culture, and the widespread adoption of digital technologies. Government initiatives like Digital India, Startup India, and the recently announced Anusandhan National Research Fund are laying a robust foundation for innovation. Key sectors such as information technology, biotechnology, and renewable energy are spearheading this transformation, positioning India as a potential global leader in innovation.

The incredible India’s growth has also been made possible by a series of structural reforms and initiatives that have enabled the country to emerge from a long period of backwardness and explore new frontiers of innovation and economic growth. In this scenario, it is important to enable its companies and services to more easily reach international markets. In 2009, India signed a free trade agreement with ASEAN and South Korea, in 2011 with Japan, in 2022 with Australia and New Zealand, in 2025 with the United Kingdom, and we are currently close to a free trade agreement with the European Union.

With these premises, I am fairly certain that India will play a fundamental role – both economically and politically – in the global landscape of the near future.

By Domenico Greco