India's economic landscape continues to exhibit dynamic growth and strategic initiatives, positioning the nation for significant global influence. Defence Minister Rajnath Singh affirmed that India is currently the world's fourth-largest economy and is firmly on track to become the third-largest. He further noted that, according to IMF average growth rates, India is set to be the world's second-largest economy in terms of purchasing power parity by 2038.

Economic Performance and Outlook

Growth in the Indian economy is expected to have maintained its momentum through the September quarter of 2025-26 (Q2FY26), even if the headline number might be slightly below the 7.8% recorded in the June quarter. This continued strength is attributed to a favorable base effect and subdued deflator growth. However, analysts predict a modest performance for India Inc. in the September quarter, with net profits for the Nifty 50 estimated to rise by approximately 6-7% year-on-year. Subdued demand for most of the quarter and the impact of a heavy monsoon on consumer-oriented companies are cited as contributing factors, though a sharp depreciation in the rupee could benefit exporters.

Aggressive Pursuit of Trade Agreements

India is actively strengthening its international trade ties. Senior officials from India and the European Union commenced the 14th round of talks for a proposed Free Trade Agreement (FTA) on October 6 in Brussels, aiming to resolve differences and finalize negotiations soon. Simultaneously, India and Qatar are targeting mid-2026 for the finalization of an FTA, with Union Minister Piyush Goyal expressing confidence that bilateral trade could double by 2030. Furthermore, India and Chile are fast-tracking discussions to finalize a Comprehensive Economic Partnership Agreement (CEPA) by the end of the year, with a particular focus on critical minerals.

Growing Energy Demands

India's energy consumption is set to surge dramatically. BP's Chief Economist, Spencer Dale, projected that India would account for 12% of the world's energy demand by 2050, up from 7% in 2023. The country's oil demand is expected to grow more than any other nation, reaching 9.1 million barrels per day by 2050 from 5.4 million in 2023, while natural gas demand is also projected to more than double. Dale emphasized the importance of increasing domestic oil and gas production and accelerating electrification, backed by coal and renewables, to enhance India's energy resilience.

Corporate and Market Highlights

On the corporate front, LG Electronics successfully raised ₹3,475 crore from anchor investors, including ADIA and Goldman Sachs, ahead of its Initial Public Offering (IPO). IndusInd Bank promoter IIHL Mauritius acquired a 100% stake in Sterling Bank, Bahamas. Lalithaa Jewellery also received SEBI approval to raise ₹1,700 crore through an IPO. Indian markets ended higher on October 6, with the BSE Sensex climbing about 580 points and the NSE Nifty 50 closing above the 25,000 mark.

Policy and Regulatory Developments

In regulatory news, the Supreme Court has decided to examine the constitutional validity of the Securities Transaction Tax. Additionally, the Ministry of Statistics is undertaking a revision of its Consumer Price Index (CPI) methodology, specifically addressing how free public distribution of food staples should be incorporated into the inflation gauge.