🏆 Fourth-largest economy: India has surpassed Japan to become the world’s No. 4 economy at USD 4.2 trillion. Growth is stronger than last year but cooling: after 8.2% in the first half, 7.4% is expected through March 2026.
🏍️ Rural revival: 42.2% of rural households saw income gains in 2025, and 80% reported higher consumption. Cuts to income and consumption taxes are supporting purchasing power.
💰 Capital markets on fire: About USD 24 billion flowed into IPOs in 2025. The key driver is massive monthly inflows (~USD 3 billion) into equity mutual funds — the market is clearly led by domestic capital.
🏗️ Investment cycle turns: More than 80% of CEOs plan new investments or capacity expansion in 2026. “Make in India,” localization, and infrastructure spending are starting to pay off.
⚠️ Trump risk: Despite threatened 500% U.S. tariffs, geopolitical pressure, and roughly USD 18 billion in foreign outflows, India remains resilient thanks to strong domestic financing, healthy banks, and inflation kept below the 4% target.
Background
India is aiming for third place by 2028, set to overtake Germany after Japan. By 2030, GDP is expected to reach USD 7.3 trillion, adding roughly USD 1 trillion every 12 to 18 months. Per capita income has nearly doubled since 2014 to USD 2,700.
Prime Minister Modi has cleaned up banks, reformed taxes, and delivered stability in a volatile region. With only 2.1% of household savings invested in equities, a booming startup scene, and roughly half of the world’s digital transactions flowing through the country, India’s upside — as the world’s second-largest smartphone producer — remains substantial.
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