India's economy accelerates as inflation declines and exports rise

Current situation

India's economy is the quickest expanding major economy, with real GDP growth projected at 6.5% in 2024-25 and anticipated to maintain the same pace in 2025-26.

Amid global uncertainties, solid domestic demand, decreasing inflation, increasing exports, and strong capital markets bolster this growth.

Important signs such as historic foreign exchange reserves, a sustainable current account deficit, and rising foreign investment showcase India’s economic strength and international faith in its future potential.

Crisis Economic Expansion

India’s real GDP expanded by 6.5% in 2024-25, and the Reserve Bank of India anticipates comparable growth in 2025-26.

The United Nations projects a growth of 6.3% this year and 6.4% the following year, while the Confederation of Indian Industry predicts growth ranging from 6.4% to 6.7%, indicating robust and steady economic performance.

Trends of Inflation in India

In June 2025, the Consumer Price Index (CPI) inflation fell to 2.10%, the lowest level since January 2019, and it remains comfortably within the Reserve Bank of India's target range of 4% with a deviation of ±2%.

The Wholesale Price Index (WPI) inflation experienced a slight decrease to -0.13% in June 2025.

The WPI Food Index inflation decreased to -0.26%, indicating reduced food prices throughout the year.

India's Export Expansion

As reported by the Ministry of Commerce & Industry, in the initial quarter of FY 2025–26 (April–June 2025), total exports reached US$ 210.31 billion, showing a 5.94% rise compared to the prior year, whereas imports rose by just 4.38%.

This resulted in a 9.4% decrease in the trade deficit, improving to – US$ 20.31 billion from – US$ 22.42 billion for the same timeframe last year.

Service exports became a significant growth catalyst, reaching US$ 98.13 billion, a 10.93% rise compared to the prior year.

Government Efforts Enhancing India’s Export Environment

Commerce International & Promotion des Exportations :

New Foreign Trade Policy (FTP) 2023: Emphasizes export benefits, improving business operations, and sectors such as e-commerce and advanced technology goods. Launched a temporary Amnesty Program to assist exporters in resolving outstanding authorizations.

RoDTEP and RoSCTL Programs: Offer tax and duty refunds to exporters, aiding industries such as pharmaceuticals, chemicals, and steel.

Districts as Trade Centers: Recognizes high-potential goods within each district and offers infrastructure and market connections.

Trade Infrastructure for Export Scheme (TIES) & Market Access Initiative (MAI): Facilitate infrastructure enhancement and promotional activities for increased export performance.

Infrastructure and Logistics:

National Logistics Policy (NLP) & PM GatiShakti: Focus on lowering logistics expenses and improving multimodal connectivity via GIS-driven planning.

Production-Linked Incentive (PLI) Programs: The government has greatly boosted budget provisions for essential sectors under the PLI Program in 2025-26, reaffirming its dedication to enhancing domestic manufacturing.

Simplifying Business Operations & Digital Efforts:

Compliance and Decriminalization Reforms: By March 2025, the government eliminated more than 42,000 compliances, and since 2014, over 3,700 legal provisions have been decriminalized. In the Jan Vishwas act 2023, over 180 legal clauses were decriminalized.

National Single Window System (NSWS): Simplifies the approval process, permitting companies to seek 670 central approvals and 6,880 state approvals.

Trade Connect e-Platform: Connects more than 1.7 million registered users with Indian missions and export councils for effortless trade facilitation.

Assistance for MSME exporters: In April 2025, the Ministry of MSME established a specialized support framework for export promotion, launching 65 Export Facilitation Centres (EFCs).

Final observations

Falling prices and increasing exports indicate that India's economy is on a consistent growth trajectory, providing relief to families.

With robust demand and ongoing reforms, India is steadily progressing towards becoming the third-largest economy globally, providing stability and fresh opportunities