India hopes to become a developed economy by its centenary of independence in 2047 and maintains a positive outlook for 2025. India’s economic growth in 2025 is projected to be robust, with estimates ranging from 6.5% to 7.3%. The United Nations forecasts a growth rate of 6.6% for the year, positioning India as a major driver of global economic expansion.

As the nation moves forward with its “Viksit Bharat 2047” vision, corporate leaders must find a balance between fostering economic growth and addressing sustainability, human rights, and digital transformation. While technological advancements and digital transformation contribute to this optimism, concerns about inflation and the potential impacts of geopolitical risks dampen the outlook. In this blog, let us explore the key factors that could influence the nation’s success in achieving these ambitious goals.

Global Risks

India’s economy faces several global challenges.

Trade Tension

The potential imposition of reciprocal tariffs by the United States has raised concerns. Key sectors such as chemicals, metal products, jewellery, automobiles, pharmaceuticals, and food products could face significant losses, estimated at $7 billion annually. In 2024, India’s merchandise exports to the United States were valued at approximately $74 billion. This figure included significant contributions from pearls, gems, and jewellery, which accounted for $8.5 billion, pharmaceuticals valued at $8 billion, and petrochemicals totalling around $4 billion.

Geopolitical Risks

Rising geopolitical tensions and trade wars, particularly between the U.S. and China, have led to disruptions in global supply chains. India’s strategic positioning in the Indo-Pacific region makes it a critical player in this rivalry, with implications for trade, defence, and diplomacy.

Geopolitical risks also encompass environmental challenges, such as water shortages, especially in relation to managing shared rivers with neighbouring countries like Pakistan and China. Disputes over these vital resources could exacerbate regional tensions.

As cyber-attacks and digital espionage increase, India is vulnerable to cyber warfare, posing threats to critical infrastructure, economic resources, and national security systems. Top of FormBottom of FormIndia’s South Asian neighbourhood is facing political unrest. Conflicts in nations like Myanmar, Sri Lanka, or Nepal may result in spillover effects, posing security risks and creating humanitarian challenges for India.

Domestic Opportunities

Tapping into the domestic opportunities will give India the much-needed impetus to fuel its growth.

Manufacturing Expansion

Apple’s decision to move a portion of its iPhone production to India signifies a strategic shift towards enhancing the country’s manufacturing capabilities. This move is expected to increase India’s share in global mobile phone exports, with projections indicating that 25% of iPhones could be produced in India by 2027. Apple has gradually increased its local value addition to 20 percent for some of its models by expanding its supplier network in India, up from just 5-8 percent when the Production Linked Incentive (PLI) scheme was launched. If this trend continues, Apple could reach $30 billion in annual production within a few years, boosting India’s share in the global iPhone production ecosystem to over 26 percent, from the current 14 percent.

Infrastructure Development

Meta is set to launch a multibillion-dollar global underwater cable initiative that will cover 31,000 miles. This project aims to enhance data transmission and establish connections between the US, India, Brazil, and South Africa. This initiative is set to enhance internet connectivity, support AI developments, and boost economic cooperation, particularly benefiting regions like India.

Rural Revitalization

Rural India is making considerable progress towards realizing the vision of a developed nation by 2047, with the Union Budget playing a vital role in fostering greater self-reliance (Atmanirbhar). By prioritizing key areas such as employment, infrastructure, and economic empowerment, the budget provides crucial support for a prosperous and sustainable future for rural communities.

Additionally, India is exploring strategies from Spain to tackle urban overpopulation and encourage migration to rural areas. Investments in rural infrastructure, coupled with the growing trend of remote work, offer promising opportunities to rejuvenate these regions and alleviate urban congestion. These measures pave the way for a stronger and self-sufficient India.

Overcoming Global Challenges and Tapping into Domestic Opportunities for India’s Growth

India is navigating a complex landscape, marked by global risks such as trade disputes and geopolitical volatility, while also presenting substantial domestic opportunities. In order to navigate these challenges and seize growth prospects, India needs targeted policy initiatives, such as improving the business environment and fostering international collaboration. Strengthening partnerships in sectors like technology and innovation will not only aid in mitigating global risks but will also bolster India’s path toward becoming a developed economy by 2047.