Is India really a dead economy?

Siddharth Roy

(siddharth01.roy@gmail.com)

Recently the Trump administration took a dig at the Indian economy, proclaiming that it’s dead. This comment came in the backdrop of the US-India tariff stand-off. Although the United States of America is one of the most powerful economies, it has seen recessionary trends with the manufacturing and services sector growth declining after Donald Trump came to power. India, on the other hand, has seen around 6.5% growth rate according to the World Economic Outlook of the IMF, significantly outpacing the growth rate of America, which stands at around 2%. India currently is one of the fastest-growing economies in the world, contributing 17% to the global GDP growth. Also, India’s demographic dividend is also one of the highest in the world, with more people in the working-age population significantly contributing to the Indian economy. So, blindly making a statement that India is a dead economy is completely baseless, and it jeopardises the booming trade relations that India has with the U.S.

The Indian economy in the recent past has been on the rise in terms of growth, with a target of reaching the $5 trillion economy mark by 2047. The Indian Government has projected that India might be able to become the third largest economy by 2027. The recent Purchasing Managers Index (PMI) score of India was the highest in the last 17 years, which shows the expansionary trend in the manufacturing sector growth in India. The U.S., on the other hand, had a score lesser than that of India, with a score of 49.5. Countries with a PMI score less than 50 showcase a contraction in the economy, and more than 50 shows an expansionary trend. In that case, India’s economy is expanding, whereas the US economy is contracting, according to PMI. Although America’s manufacturing sector was given a boost with subsidies provided by Biden and protectionist policies followed by Trump, still the US manufacturing sector is stuck in a rut. India’s services sector represents 61.5% of the GDP while employing innovative approaches to economic development. This sector maintained growth rates exceeding 7.6% annually since 1991, consistently outpacing global benchmarks. The recent Economic Survey also showcases India’s services sector dominance with an average growth rate of 8.3%. When it comes to the digital economy, India demonstrates technological leadership that leaves American digital growth in the dust. From 2014 to 2019, the digital economy of India grew 2.4 times faster than the overall economy, with a 15.6% growth rate. ??The numbers are staggering: India has over 950 million internet subscribers and 650 million smartphone users. The digital economy employs 14.67 million workers and is five times more productive than other sectors. India is host to more than half of the global capability centres worldwide, most of them stationed in Bengaluru. Now looking at the foreign investment magnetism of India, India has attracted $81.04 billion in FDI inflows in FY 2024-25, representing a 14% increase. Over the last eleven financial years, i.e., from 2014 to 2025, India attracted $748.78 billion in FDI, which is a 143% increase over the previous eleven years. ??The number of source countries for FDI increased from 89 in FY 2013-14 to 112 in FY 2024-25, demonstrating India’s growing global investment appeal. The U.S. might be criticising India’s economy, but they have contributed around 15.8% of the total FDI inflows in our country. Global giants like Apple and Tesla are setting their foot in Mumbai’s BKC, increasing foreign capital inflow to India manifold. India has one of the biggest consumer markets in the world, and big companies are finding it lucrative to invest in a growing economy like India, which in a way provides a necessary boost to the growth of our economy. When it comes to renewable energy leadership, India’s renewable energy sector represents economic leadership in the global transition to sustainable development. India’s total renewable energy capacity reached 220 GW in March 2025, with a record annual addition of 29.52 GW. Solar capacity also increased 30-fold from 2.5 GW in 2014 to 105.65 GW in 2025. India hosts the world’s largest solar park, situated in Bhadla, Rajasthan, with a capacity of 2245 MW. Moreover, India is on the verge of completing the world’s largest hybrid renewable energy park in Kutch, Gujarat, which will have a capacity of 30000 MW. India is also progressing significantly up the G20’s green ladder, with India holding the lowest per capita CO? emissions among the G20 nations. When it comes to startups, India has the 3rd largest startup ecosystem in the world, with a Compound Annual Growth Rate (CAGR) of around 49%. Although the U.S. is leading in the startup race, India isn’t far behind and might even topple America in the years to come. India’s monetary and fiscal policy have also been able to curb the inflation rates, which were really high post the Covid pandemic, which in a way has kept our economy stable.

The world has been a witness to the emerging economy of India. Global giants like Apple and Tesla have also been witnesses, and hence, they shun the threats of the Trump administration and are opening their manufacturing units in India. Most of the iPhones are now made and manufactured in India. Even India’s concert ecosystem has recently contributed to the overall economic growth, with large investments in this sector coming from ticket bookings. IPL, being the largest league of cricket played in the world, has for many years contributed to the Indian economy with huge investments pouring from giant companies and attracting TRP.

The Trump administration’s remarks of the Indian economy being dead are baseless and seem like a disproportionate outburst to the failure in signing FTA. Though there is a lot of scope for improvement when it comes to skilling our workforce and reaping high dividends from them in this Amrit Kaal, our economy is definitely not dead. Trump’s dead economy comment is as baseless as his reciprocal tariff rant, which is jeopardising its own trade relations with other countries. The India-UK pact is a template from which the U.S. government should learn and stop bullying emerging economies with tariff threats. India is rising; her economy is booming, and its growth will not halt till India becomes Viksit Bharat.