India’s economic churn and the nectar of growth

Hardeep S Puri

(The writer is the Union Minister for Petroleum & Natural Gas)

Indian civilisation has long believed that trial precedes triumph. Like the churning of the ocean—Samudra Manthan—where turbulence yielded nectar, our economic churns have always produced renewal. From the crisis of 1991 came liberalisation; from the pandemic came a digital surge. And today, from the cacophony of doubters calling India a “dead economy” emerges the fact-rich story of resilience: faster growth, stronger buffers, and broader opportunity.

Consider the latest GDP numbers. Real GDP grew 7.8% in Q1 FY 2025-26, a five-quarter high. Crucially, this growth is broad-based: GVA is up 7.6%, with manufacturing at 7.7%, construction at 7.6%, and services at ~9.3%. Nominal GDP expanded 8.8%. This is not an arbitrary spike; it reflects rising consumption, robust investment, and the payoff from steady public capex and logistics reforms that reduce costs across the economy.

India is now the world’s fourth-largest economy—and the fastest-growing major one, outpacing even the first and second largest, the US and China. On present trajectories, we are poised to overtake Germany and become the third-largest economy in market-exchange terms before the decade ends. Our momentum matters globally; independent estimates show India already contributes over 15% of incremental world growth. The Prime Minister has set a clear ambition—raising our share toward 20% as reform deepens and new capacity comes online.

Markets and rating agencies have recognised this discipline. S&P Global delivered India’s first sovereign rating upgrade in 18 years, citing robust growth, monetary credibility, and fiscal consolidation. That upgrade lowers borrowing costs and widens the investor base. It also punctures the “dead economy” narrative: independent assessors of risk have voted with their ratings.

Equally important is who benefits. Between 2013–14 and 2022–23, 24.82 crore Indians moved out of multidimensional poverty. That shift rides on basic-services delivery at scale—bank accounts, clean cooking fuel, health cover, tap water—and on direct transfers that empower the poor to make choices. This scale of growth—amid the world’s most vibrant democracy and with remarkable demographic challenges—is distinctive. India’s model values consensus-building, competitive federalism, and last-mile delivery through digital rails. It is slower to announce, faster to implement, and built to last. When critics compare us to authoritarian sprinters, they miss the point: we are building a marathoner’s economy.

As India’s Petroleum Minister, I can attest to how our energy security supports this rapid growth. India, today, stands as the third-largest energy consumer, fourth-largest refiner, and fourth-largest LNG importer in the world. We operate over 5.2 million barrels per day of refining capacity, with a clear roadmap to expand beyond 400 MTPA by the end of the decade.

India’s energy demand—projected to double by 2047—will account for nearly a quarter of incremental global demand, making our success central to global energy stability. The government’s approach has been to combine security with reform. Exploration acreage has expanded from 8% of sedimentary basins in 2021 to over 16% in 2025, with a target of covering 1 million sq. km by 2030. The drastic reduction of so-called ‘no-go’ areas by 99% has unlocked vast potential, while the Open Acreage Licensing Policy (OALP) ensures transparent, competitive bidding. New gas pricing reforms—linking prices to the Indian crude basket and offering 20% premiums for deepwater and new wells—have spurred investment.

Our energy story is not only about hydrocarbons; it is also about transition. Ethanol blending has surged from 1.5% in 2014 to today, saving over ?1.25 lakh crore in foreign exchange and paying more than ?1 lakh crore directly to farmers. Over 300 compressed biogas plants are being rolled out under SATAT, with a 5% blending mandate targeted by 2028, and Oil PSUs are leading the charge in green hydrogen.

Much heat has been generated in some quarters about India’s purchase of Russian crude. Let us separate fact from noise. Russian oil has never been banned like Iranian or Venezuelan crude; it is under a G7/EU price-cap system deliberately designed to keep oil flowing while capping revenues. There have been 18 rounds of such packages, and India has complied with each one. Every transaction has used legal shipping and insurance, compliant traders, and audited channels. We have not broken rules; we have stabilised markets and kept global prices from spiralling.

Some critics allege India has become a “laundromat” for Russian oil. Nothing could be further from the truth. India has been the fourth-largest exporter of petroleum products for decades—long before this conflict—and our refiners process a basket of crudes from across the globe. Exports keep supply chains functioning; indeed, Europe itself turned to Indian fuels after banning Russian crude. The volume of exports and refining margins (GRMs) remain broadly the same; there is no question of profiteering.

Equally important, India acted decisively to shield its citizens when global prices spiked after the Ukraine conflict. Oil PSUs absorbed losses of up to ?10 per litre on diesel; the government cut central and state taxes; and export rules mandated that refiners selling petrol and diesel abroad must sell at least 50% of petrol and 30% of diesel in the domestic market.

These measures, at considerable fiscal cost, ensured that not a single retail outlet ran dry and that Indian households saw stable prices. The larger truth is this: there is no substitute for the world’s second-largest producer, supplying nearly 10% of global oil. Those pointing fingers ignore this fact. India’s adherence to all international norms prevented a catastrophic $200-per-barrel shock – aligning with our civilisational values of Vasudheiva Kutumbakam.

It is the same ‘Made in India’ for the worldvision that shapes the new industrial revolution taking shape in India, which spans semiconductors, electronics, renewables, defence, and speciality chemicals—powered by PLI incentives and the PM Gati Shakti logistics backbone. The momentum in semiconductors is now reaching a new scale—a testament to policy seriousness and execution. The Cabinet recently approved four additional semiconductor manufacturing projects under the India Semiconductor Mission, and the Prime Minister’s recent visit to a semiconductor facility in Japan and renewed Japanese investment commitments underline a shared roadmap for resilient, trusted tech supply chains.

The digital economy multiplies these gains. India leads the world in real-time payments; UPI’s ubiquity raises productivity for small businesses, and our startup ecosystem is translating innovation into exports of services and solutions. When digital rails meet hard infrastructure, the effect is compounding – lower friction, higher formalisation, and a virtuous circle of investment and consumption.

The arc ahead is promising. Independent projections (EY) suggest that by 2038 India could emerge as the world’s second-largest economy in PPP terms, with a GDP above $34 trillion. This trajectory rests on steady reforms, human capital, and abundant, clean, reliable energy for every enterprise and household.

The test of a great civilisation lies in its crucible moments. When doubted in the past, India responded with Green Revolutions, IT Revolutions, and the quiet dignity of millions lifting themselves through education and enterprise. Today’s moment is no different. We will keep our gaze steady, our reforms relentless, and our growth rapid, democratic, and inclusive—so that the benefits reach the most underserved. To the naysayers, the scoreboard is the answer. Under Prime Minister Narendra Modi’s leadership, Viksit Bharat is not an aspiration; it is a deliverable—and the numbers are simply the latest chapter in that larger story.