Trump Tariffs? No Problem – India Racing to Global Economic Throne

India’s economy continues its remarkable expansion despite global uncertainties — including trade tensions and rising tariffs — positioning it as the fastest-growing major economy in the world. Recent data and multilateral institution forecasts show robust growth trajectories that outpace most peers and underpin global optimism about India’s long-term economic rise.

Strong Growth Amid Global Pressures

India is sustaining high economic growth even as global headwinds persist from increased trade barriers and geopolitical risks. The International Monetary Fund (IMF) has raised its growth forecast for the 2025-26 fiscal year to around 7.3%, reflecting strong momentum in corporate earnings and domestic demand.
Other institutions have also highlighted India’s resilience. For example, the Reserve Bank of India (RBI) reports robust demand recovery, buoyant industrial activity and growing rural consumption, and projects India to remain the fastest-growing major economy.

Meanwhile, the World Bank and other international bodies continue to rank India at the top among large economies for growth performance, reinforcing the narrative of sustained expansion.

What’s Driving India’s Growth

Economists attribute India’s strong growth to a combination of demographics, structural reforms, and domestic demand. A younger, expanding workforce and rising labour force participation help underpin long-term expansion, while reforms in taxation, labour laws and investment climate bolster productivity and investor confidence. Reports also highlight continued strength in services and manufacturing as key contributors to GDP.

Long-Term Forecasts: India on Track to Economic Supremacy

Projections extending decades into the future paint a transformative picture of India’s global economic standing:

• According to long-term scenarios modelled by institutions like the OECD and demography-focused analysts, India could surpass the United States in economic size by the mid-21st century as China’s population declines and India’s workforce expands.

• Some analyses suggest that by the end of this century, India’s GDP could dwarf that of China and rival or exceed that of the United States, with sustained growth averaging high rates and demographic advantages playing a major role.

• The Centre for Economics and Business Research (CEBR) similarly forecasts a dramatic shift in global rankings, with India projected to be significantly larger than China and the U.S. later this century if current trends continue.

These long-range forecasts rely on demographic trends and productivity assumptions, and are not certainties — global policy, investment patterns, and technological change could alter outcomes. But for now, they underscore India’s ascendancy in the world economic order.

Challenges and the Road Ahead

While the outlook is largely positive, economists note risks that could temper growth. External trade pressures — including higher tariffs — may dampen export demand, and global slowdown scenarios could impact investment flows. Structural challenges in infrastructure and income inequality also remain key areas for policy focus.

Nevertheless, India’s current economic performance and future projections continue to draw praise from global institutions — suggesting that its rise on the world stage may be both enduring and transformative.