India’s Economy Vs World’s
Introduction
In last week or so, there’s been a lot of chatter about India’s economy.
Everyone, from uncles at tea stalls to the economists on TV, is talking about this “dead economy” comment.
Former US President Donald Trump threw that phrase around, and our own opposition leader, Rahul Gandhi, seemed to agree with him.
It’s certainly got people thinking.
But what’s the real story? Is India’s economy truly “dead”?
Allow me to share with you what I think about this topic.
What The Number Is Saying?
When someone calls an economy “dead,” it usually means it’s shrinking.
Investments are not growing, and people are losing jobs.
But if we look at the official numbers, India’s economy is actually growing at a decent pace.
Scottish historian William Dalrymple was quick to point out that India’s economy grew twice as fast as the US last year (read this tweet). He says, this year, it’s even forecast to grow at three times the US rate.
That’s hardly “dead,” is it?
The International Monetary Fund (IMF) backs this up. They project India’s economy to grow at 6.4% in 2025 and 2026.
In IMF’s official website, it shown that the real GDP growth rate is 6.2%. Compare that with United State’s real DGP growth of just 1.8% (see here) in the same period.
| Description | India | United States |
| Real GDP Growth Rate | 6.2% | 1.8% |
| GDP (Current Price) | $4.19 K | $30.51 K |
| GDP Per Capital (Current Price) | $2.88 K | $89.11 K |
Globally, the average growth is around 2.7%, with advanced economies like the US staying below 2%.
So, India is clearly outpacing many others.
| SL | Country | GDP-2023 (USD) | Share of World GDP |
| 1 | United States | 27.721 trillion | 26.11% |
| 2 | China | 17.795 trillion | 16.76% |
| 3 | Germany | 4.526 trillion | 4.26% |
| 4 | Japan | 4.204 trillion | 3.96% |
| 5 | India | 3.568 trillion | 3.36% |
| 6 | United Kingdom | 3.381 trillion | 3.18% |
| 7 | France | 3.052 trillion | 2.87% |
| 8 | Italy | 2.301 trillion | 2.17% |
| 9 | Brazil | 2.174 trillion | 2.05% |
| 10 | Canada | 2.142 trillion | 2.02% |
| 11 | Russia | 2.021 trillion | 1.90% |
| 12 | Mexico | 1.789 trillion | 1.69% |
| 13 | Australia | 1.728 trillion | 1.63% |
| 14 | South Korea | 1.713 trillion | 1.61% |
| 15 | Spain | 1.62 trillion | 1.53% |
| 16 | Indonesia | 1.371 trillion | 1.29% |
| 17 | Netherlands | 1.154 trillion | 1.09% |
| 18 | Turkey | 1.118 trillion | 1.05% |
| 19 | Saudi Arabia | 1.068 trillion | 1.01% |
| 20 | Switzerland | 0.885 trillion | 0.83% |
Source: worldometers
From the above table, you can see that GDP contribution of India is more than developed countries like UK, France, Italy, Canada, Australia, etc.
Another source (mint), quoting IMF, that India will contribute almost 16% of global growth.
The World Bank and IMF have both called us the fastest growing major economy globally. This indicates significant vitality, not death.
But What About the Concerns?
It is true that not all sunshine and roses with India’s GDP.
A financial influencer, Akash Shrivastava, put it quite bluntly, suggesting the term might apply to an “economy for the top 1%”. He raises some valid points that we, as Indians, often discuss amongst ourselves:
- Growth Quality: While our overall GDP is growing, the per capita income is still quite low. Our ranking is 140th globally at around $3,000 per year. This means many people can’t afford quality goods, limiting growth in consumer sectors.
- Income Inequality: The growth hasn’t been evenly distributed. The rich are getting richer, but the poor and middle class often feel stagnant. Poverty levels remain a concern, and inequality is on the rise.
- Taxes and Migration: High taxes, even on some basic goods, can discourage people. India also leads in millionaire migration, meaning a significant number of wealthy individuals are leaving the country. We also receive the most remittances, which, while showing hard work, also hints that many are seeking better opportunities abroad.
- Manufacturing and Jobs: Our manufacturing sector’s growth has been slower than even agriculture since 2019-20. There’s a stark mismatch between skills and opportunities, leading to high youth unemployment. Female participation in the economy is also among the lowest globally.
- Fundamental Investments: We need to invest more in crucial areas like education, healthcare, and innovation, as our spending here is still below global averages.
These issues are real, and they touch the lives of everyday Indians.
They are problems that need our attention and long-term solutions, not just feel-good slogans.
Conclusion
So, is India a “dead economy”?
The simple answer is no. It’s far from it.
We are a complex, vast nation of 1.4 billion people. To label us “dead” would be to ignore the incredible resilience, the rapid digital adoption, and the entrepreneurial spirit that defines so many Indians.
Yes, we have significant challenges.
Persistent inequality, rural distress, and the need for better job creation are critical.
These are not signs of a “dead” economy, but rather challenges of a developing nation. We know this and we are also striving for more inclusive and sustainable growth.
Though I must say that, we are actually late in overhauling our education system.
A boost in manufacturing was required yesterday. Does it mean that our manufacturing is not advancing? No, but compared to similar economies, we are lagging.
It is also essential to ensure that the benefits of growth reach everyone.
Ultimately, Trump’s comments might be political posturing for his own domestic audience. For us, we must also look inwards. No matter what any Joker tells about us, it neither make as Dead or make it a Vishwa Guru.
We must remain aware of our strengths and weaknesses.
We need to acknowledge our problems, discuss them constructively, and work towards solutions that ensure our growth truly benefits all Indians.
Our economy is not dead; it’s just getting started, with immense potential waiting to be fully unlocked.
Have a happy investing.
