India remains one of the world’s fastest-growing major economies, with real GDP expanding by 6.5% in 2024 and expected to rise to 7.4% in FY 2025–26 according to the Indian government’s First Advance Estimates.¹ This performance is supported by strong domestic demand, a rapidly expanding digital economy, and a youthful population that continues to supply a steady stream of skilled labor. India’s population—now exceeding 1.43 billion—provides a vast consumer base as well as a dynamic workforce fueling productivity and innovation.²

The country’s expanding middle class, coupled with low inflation (which fell to 2.82% in May 2025), has strengthened household purchasing power and sustained domestic consumption, historically one of India’s most important economic engines.³

Sectoral Growth and Economic Composition

While multiple sectors are experiencing rapid expansion, the services sector—including IT, financial services, real estate, and communications—continues to dominate, contributing over 60% of India’s GDP.⁴

The retail sector, valued at US$1.06 trillion in 2024, is projected to nearly double to US$1.93 trillion by 2030, driven by rising disposable incomes, e‑commerce penetration, and rapid urbanization.⁵ Retail contributes over 10% to national GDP and employs around 8% of the workforce.⁶

Other fast‑growing industries include:

• Information Technology and Software Services – benefiting from global digital transformation and India's leadership in outsourcing.⁷
• Financial Technology (FinTech) – with India reaching the world’s highest fintech adoption rate (87%) and record UPI transaction volumes.⁸
• Construction – projected to grow at 8.6% in FY 2024–25, driven by infrastructure and housing demand.⁹
• Electronics and Semiconductors – accelerated by Production‑Linked Incentive schemes and major foreign investment commitments.¹⁰
• E‑commerce and Consumer Goods – valued at US$70 billion in 2024, expected to reach US$325 billion by 2030.¹¹
• Automotive, Biotechnology, Health Care, and Telecommunications, all benefiting from both domestic and export-driven growth.

Government Economic Policy and Foreign Investment

The Indian government continues to pursue policies aimed at attracting higher levels of Foreign Direct Investment (FDI), simplifying regulatory frameworks, and promoting manufacturing under initiatives such as Make in India. FDI inflows remained strong, with US$73.5 billion recorded in 2019–20 and continued resilience during subsequent years of economic recovery.¹²

Infrastructure investment—particularly in transportation, power, and digital connectivity—has sharply improved the ease of doing business in many states. Reforms in construction permitting, insolvency resolution, and cross‑border trade have been particularly impactful. India rose to 63rd place in the World Bank’s Ease of Doing Business 2020 rankings, a jump of 79 places over five years.¹³

Although the World Bank discontinued global Ease of Doing Business rankings after 2020, the underlying indicators remain relevant. India continues to perform well in categories such as:

• Getting Electricity
• Trading Across Borders
• Resolving Insolvency

Challenges persist in contract enforcement and property registration, both of which remain slower and more costly compared with OECD economies.¹⁴

Current Regulatory Environment

Starting a business in India remains more complex than in many advanced economies, but ongoing reforms continue to reduce bureaucratic barriers. India’s youthful, increasingly well‑educated workforce and rising levels of FDI make the country an attractive destination for global firms seeking long‑term economic opportunities.

The government’s emphasis on digital governance, simplified tax structures (including consolidation through GST), and innovation‑driven economic modernization positions India as a rapidly emerging global economic competitor, particularly relative to China.

1. Press Information Bureau. First Advance Estimates of GDP 2024–25. 2025. https://pib.gov.in/PressReleasePage.aspx?PRID=2090875. Accessed January 15, 2025.
2. World Bank. India Population Data (2024). https://data.worldbank.org/indicator/SP.POP.TOTL?locations=IN. Accessed January 15, 2025.
3. Ministry of Finance (India). Inflation Report, May 2025. https://finmin.nic.in. Accessed January 15, 2025.
4. Trading Economics. India GDP Annual Growth Rate. 2025. https://tradingeconomics.com/india/gdp-growth-annual. Accessed January 15, 2025.
5. Deloitte–FICCI. Spotting India’s PRIME Innovation Moment. 2025. https://www.deloitte.com/in/en. Accessed January 15, 2025.
6. IBEF. Retail Industry in India. 2025. https://www.ibef.org/industry/retail-india. Accessed January 15, 2025.
7. Spherical Insights. Top Fastest‑Growing Sectors in India 2024. 2024. https://www.sphericalinsights.com. Accessed January 15, 2025.
8. Invest India. FinTech Sector Report. 2025. https://www.investindia.gov.in. Accessed January 15, 2025.
9. Press Information Bureau. GDP Sectoral Growth Highlights. 2025. https://pib.gov.in. Accessed January 15, 2025.
10. Invest India. Electronics & Semiconductor Sector Overview. 2025. https://www.investindia.gov.in. Accessed January 15, 2025.
11. Invest India. E‑commerce Sector Insights. 2024. https://www.investindia.gov.in. Accessed January 15, 2025.
12. IndBiz. FDI Trends and Ease of Doing Business. 2020. https://indbiz.gov.in. Accessed January 15, 2025.
13. World Bank. Doing Business 2020 Report: India. 2020. https://archive.doingbusiness.org. Accessed January 15, 2025.
14. Economic Times. Ease of Doing Business 2020 Analysis. 2019. https://economictimes.indiatimes.com. Accessed January 15, 2025.