India’s Economic Resilience: Strong Q1 Growth and a Vision for Global Leadership

India’s economy opened the fiscal year on a powerful note, with GDP expanding by 7.8 percent in the first quarter of FY 2025-26. Prime Minister Narendra Modi highlighted this performance as evidence of the country’s ability to thrive even amid a difficult global environment marked by protectionism and economic uncertainty. Speaking at the Semicon India 2025 conference, Modiji described the growth as broad-based, reflecting strength across manufacturing, construction, agriculture, and services. He framed the achievement as a testament to India’s capacity to chart its own path, regardless of external headwinds.

Prime Minister Narendra Modi. (ANI) | Hindustan Times

Rising Above Global Protectionism

In his address, Modiji referred to the phenomenon of “economic selfishness,” a veiled reference to growing global protectionist policies, including steep tariffs imposed by the United States on Indian exports. He emphasized that India’s resilience lies in its ability to withstand such shocks, sustaining growth through internal demand and domestic reforms. While many global economies are slowing under the weight of tariffs and trade wars, India has managed to keep momentum alive, underscoring the strength of its fundamentals and the confidence of its industries and citizens.

Sectoral Strength and Momentum

The first quarter’s performance was not driven by a single industry but rather by a balanced surge across the economic spectrum. Manufacturing posted impressive expansion, construction maintained high growth, and agriculture—despite seasonal constraints—contributed positively. The services sector emerged as the strongest pillar, registering growth of over 9 percent, reinforcing India’s status as one of the world’s most dynamic service economies. Government expenditure and fixed capital formation also added significantly to the overall GDP, reflecting the role of public investment and infrastructure in sustaining growth.

Stability in an Uncertain World

India’s growth has stood out not only because of its pace but also because of its stability. With inflation cooling to an eight-year low and the Reserve Bank of India maintaining interest rates at 5.50 percent, the country has created space for further policy support if needed. At a time when many economies are struggling with inflationary pressures and monetary tightening, India’s ability to maintain stability has enhanced investor confidence and strengthened its long-term outlook.

A Strategic Vision for the Future

Modiji used the occasion to reaffirm India’s long-term ambition of becoming the world’s third-largest economy. Independent forecasts suggest that by 2030, India could reach a GDP of $7.3 trillion, positioning itself just behind the United States and China. The Prime Minister linked this aspiration to strategic sectors such as semiconductors, describing them as the “digital diamonds” of the 21st century. With the global semiconductor industry expected to surpass $1 trillion in value, PM Modi expressed confidence that India could claim a significant share, supported by policy incentives, global partnerships, and domestic innovation.

Strengthening International Partnerships

India’s growth narrative is also being reinforced by deeper international engagements. During PM Modi’s recent visit to Japan, Tokyo pledged over ¥10 trillion ($68 billion) in investments, with a focus on technology, infrastructure, and defence. In parallel, India has strengthened its long-standing energy ties with Russia, a relationship that Modiji described as strategically vital amid shifting global power equations. These alignments, combined with reforms at home, are enabling India to build a more resilient and diversified growth model.

The Role of Reforms and Infrastructure

The current momentum is rooted in years of reform and structural transformation. Landmark policies such as the Goods and Services Tax (GST), initiatives like Make in India and Atmanirbhar Bharat, and mega infrastructure programmes like PM Gati Shakti have laid a strong foundation for growth. Infrastructure expansion, particularly in construction and transport, has been one of the largest contributors, employing tens of millions and generating spillover benefits for manufacturing and services. These reforms are not just fueling short-term gains but also positioning India as a sustainable growth engine for the decades ahead.

The MGMM Outlook

India’s economic performance in the first quarter of FY 2025-26 reflects both resilience and strategic foresight. With GDP growth at 7.8 percent, the nation has demonstrated its ability to sustain momentum despite global uncertainties such as protectionism and trade wars. The growth was broad-based, led by manufacturing, construction, agriculture, and a strong services sector that posted over 9 percent expansion. This balance across industries, coupled with record-low inflation and stable monetary policy, signals that India’s fundamentals remain strong, boosting investor confidence and reinforcing its global standing.

At the heart of this performance lies the vision and leadership of Prime Minister Narendra Modi. His reform-driven policies—ranging from GST to Atmanirbhar Bharat—along with infrastructure-focused programmes like PM Gati Shakti, have laid the groundwork for sustained growth. Modiji has also emphasized strategic global partnerships, securing massive investments from Japan and deepening energy ties with Russia, while pushing India’s entry into high-value sectors such as semiconductors, which he calls the “digital diamonds” of the 21st century. With a roadmap to make India the world’s third-largest economy by 2030, PM Modi’s leadership has been central in turning challenges into opportunities and positioning India as a nation shaping the future global order.

(Sources: Hindustan Times, Times of India, PIB)