From erstwhile poorhouse to future powerhouse, the big guns are betting on…

India is rapidly emerging as one of the world’s fastest-growing economies and is poised to become a future leader  of the next wave of economic powerhouses. Multilateral organisations, including the IMF and the World Bank, have projected India’s GDP growth at 6.5 per cent in 2025 and expect it to continue outpacing other major economies.

Over the past two decades, India has witnessed robust economic growth and social progress. Though there are many informal labour markets and regional disparities, its development and growth persist.

India aspires to become a developed economy (Vikshit Bharat) by 2047; to achieve that, it needs to sustain an annual growth rate of 7.8 per cent (World Bank, November 10, 2025). It needs to increase productivity, jobs, and investments, and most importantly, it needs to carry out structural reforms.

Despite slow global growth, India managed to have higher growth rates due to its robust domestic demand. India has a demographic advantage with a vast working-age population, which is expected to peak at nearly 1 billion by 2035, according to UN population data. And this sets it apart from other nations.

The GDP growth has increasingly tied to India’s digital leap. An increase in platforms such as UPI shows how technology can shape everyday transactions. Digital inclusion is an important structural shift which strengthens domestic demand and lays the foundation for India’s ambition to become a Global Digital Innovation Hub.

India —  the leader of the Digital Hub

India has become a key player in the global digital world — thanks to its talented workforce, strong digital infrastructure and government programmes such as Digital India, which have helped achieve this feat.

Government initiatives like Atmanirbhar Bharat are helping the digital economy achieve this transformation. With more than 1,600 Global Capability Centres (GCC) now, India is positioned as a leader in the Global Innovation Hub.

The Indian economy is capable of providing both large-scale operations and specialised innovations, along with a unique combination of technical skills and cost efficiencies.

Many initiatives and policies have been put in place by the government to encourage local growth and also protect intellectual property. There is a shift in the IT industry from outsourcing to building and innovating digital products and platforms.

However, no economy can rely completely on digital progress. There is a need for more investments in infrastructure and social inclusion. Growth should be broad-based with the linking of rural roads, uninterrupted power supply and seamless communication.

In simple terms, no developing nation can afford to ignore infrastructure challenges, and India is no exception.

Gaps and challenges

Infrastructure gaps, inequality, and climate resilience are interconnected global issues which are predominant in developing economies.

These challenges need to be addressed comprehensively by considering social, economic and environmental factors in planning and policy.

Government spending alone is not sufficient for developing strong and new infrastructure, as it requires a large amount of capital. To attract private investments, it is essential that the Public Private Partnership (PPP) model be adopted on a large scale.

These challenges highlight how India should balance its multifarious requirements along with maintaining fiscal prudence.

However, in comparison to other emerging nations, especially BRICS nations, India is better.

India and BRICS

The emerging economies are undergoing structural shifts and recovering from the pandemic at their own speed in 2025. The following is a comparison of the BRICS nations:

Brazil, while having strong commodity prices, remains sensitive to domestic political cycles and shifts in global demand. This is one of its biggest hindrances to becoming an economic powerhouse.

Russia has displayed resilience through its shift in trade to Asia and consistent military and industrial investment. But there are stemming risks from high inflation and limited access to Western technology.

India, in comparison,  is a fast-growing large economy whose resilience is mainly driven by its service sector, along with manufacturing reforms and strong domestic demand.