India's economic outlook remains largely positive, with the International Monetary Fund (IMF) recently upgrading its Gross Domestic Product (GDP) growth projection for 2025 to 6.6%, an increase from its earlier forecast of 6.4%. This upward revision is attributed to India's robust reform initiatives and digital advancements, solidifying its position as a crucial global growth engine. The IMF also expects India to soon surpass Japan to become the fourth-largest economy by nominal GDP, eventually moving past Germany for the third position, trailing only the US and China. However, the IMF has slightly downgraded India's GDP growth projections for 2026 to 6.2%, partly due to the potential impact of increased US effective tariff rates on imports from India.
Union Commerce and Industry Minister Piyush Goyal highlighted India's consistent economic strength, stating that the country has been the fastest-growing economy globally for the past four years, with an ambitious goal to maintain this trajectory for the next two decades. He noted that over 25 crore people have been lifted out of poverty in the last decade, with the emerging neo-middle class playing a significant role in powering the economy. Goyal emphasized the importance of deepening trade relationships, particularly with Brazil, during the India-Brazil Business Dialogue in New Delhi. Both nations are aiming to broaden their Preferential Trade Agreement (PTA) and achieve a bilateral trade target of $20 billion by 2030, up from $12 billion in 2024. Additionally, India is actively engaged in trade talks with the US, EU, and Oman to further expand its global trade footprint.
The Indian stock markets responded positively to these developments and corporate earnings, with both the Nifty and Sensex indices climbing by 1% on Thursday. This surge was influenced by a slowdown in selling by overseas investors, positive second-quarter earnings, and optimism surrounding a potential US-India trade deal. Several companies reported their latest quarterly results; for instance, Infosys announced a 13% rise in profit to ā¹7,364 crore, and LTIMindtree also reported over 10% growth in net and revenue. Zepto, a quick commerce startup, successfully raised $450 million, boosting its valuation to $7 billion.
A report by Elara Securities underscored the critical role of household savings in India's journey to becoming a major economy. The report suggests that India's aspiration to sustain high growth depends on effectively channeling household savings into productive assets. There is a notable shift in savings patterns, moving away from traditional forms like bank deposits towards capital markets and pension schemes, driven by the pursuit of higher returns and long-term wealth creation.
In other news, Bangladesh has decided to scrap the Indian Economic Zone projects in Mirsarai and Mongla. This decision came after years of inactivity and a lack of response from India regarding the development work for these zones, which were initially planned as government-to-government projects under India's concessional line of credit.