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August 24, 2025 August 24, 2025 - Current affairs for all the Exams: India's Economy Surges Ahead with Record Growth, PM Modi Highlights Resilience Amid Global Challenges

India's economy is demonstrating robust growth, with Prime Minister Narendra Modi asserting its pivotal role in global economic revival and aiming to become the world's third-largest economy. Key indicators like the Purchasing Managers' Index show record expansion in services and manufacturing, alongside significant strides in exports and job creation. The government continues to push for reforms, including GST simplification and investment in key sectors, even as it navigates ongoing trade discussions with the U.S.

India's economic landscape is currently marked by strong growth and a confident outlook, as highlighted by Prime Minister Narendra Modi. Speaking at the ET World Leaders Forum 2025, PM Modi underscored India's macroeconomic stability and its potential to contribute significantly to global growth, aiming to become the world's third-largest economy by 2047. He emphasized that the country's robust fundamentals, including strengthened banking systems, low inflation, and controlled deficits, have enabled it to maintain resilience despite global headwinds.

Recent data further corroborates this positive trend. India's flash Purchasing Managers' Index (PMI) surged to 65.2 in August 2025, driven by record growth in both services and manufacturing sectors, robust exports, and rising employment. Private sector activity reached a record high in August. The nation's forex reserves also saw a climb, increasing by $1.48 billion to $695.10 billion for the week ending August 15.

Several key sectors are experiencing significant momentum:

  • Office Demand: India led the Asia Pacific (APAC) region in office leasing during the first half of 2025, securing a 70% share.

  • Electronics and Smartphones: India has surpassed China in smartphone exports to the United States. Furthermore, non-smartphone electronics exports crossed the ₹1,21,870 crore (US$14 billion) mark in FY25. The Prime Minister also announced that the first "Made in India" chip is expected to be available in the market by the end of the year.

  • Automobile Exports: India's automobile exports have seen a substantial increase, reaching ₹1.2 lakh crore annually, up from approximately ₹50,000 crore in 2014. The country has also begun exporting metro coaches, rail coaches, and rail locomotives.

  • BFSI Sector: The Banking, Financial Services, and Insurance (BFSI) sector is projected to add 250,000 jobs by 2030, with a significant focus on tier-II and tier-III cities. In a notable development, the Reserve Bank of India (RBI) approved Sumitomo Mitsui Banking Corporation (SMBC)'s acquisition of up to 24.99% stake in Yes Bank, making the Japanese lender potentially the largest shareholder.

Government initiatives continue to support this growth trajectory. The government has disbursed ₹21,689 crore under 12 Production Linked Incentive (PLI) schemes until July 31. Discussions are ongoing regarding a two-slab Goods and Services Tax (GST) structure, with the GST Council scheduled to meet on September 3-4 to finalize these reforms, which are anticipated to simplify the tax system. Additionally, the government has raised ₹1.42 lakh crore through asset monetization until FY25.

India is also actively engaging in international trade. While trade talks with the U.S. are ongoing despite recent tariff increases, India has concluded another round of talks for a comprehensive trade pact with Australia.

Despite the overall positive outlook, some challenges persist. The Non-Performing Assets (NPA) against outstanding amounts under the Mudra Yojana rose to 9.8% in March 2025. Agricultural sectors face issues such as financial losses for onion growers due to non-transparent procurement, a 50% crash in raw tea leaf prices amid surging imports, and crop damage from heavy rains. Seafood exports have also remained flat.

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