Atmanirbharta's Core
India's vision of economic self-reliance, termed 'Atmanirbharta,' is not a call for isolation but a strategic initiative designed to cultivate core competencies
and enhance resilience within its economy. This strategic approach involves developing the capability to domestically produce essential goods and advanced technologies, effectively reducing the dependence on foreign sources. The emphasis is on building domestic capabilities in crucial sectors and thereby fostering self-sufficiency. This approach is built upon a foundation of three key pillars: stability, necessary reforms, and strategic schemes. These elements work in concert to address existing structural gaps within the national economy and create a more robust and self-sustaining economic model, preparing India for long-term growth and stability in an increasingly complex global environment. This comprehensive strategy is designed to ensure India’s economic independence and competitiveness.
Economic Stability Focus
The Indian government has prioritized maintaining both macroeconomic and financial sector stability. This focus involves bringing inflation under control and adhering to a path of fiscal consolidation. The government's commitment to fiscal prudence is restoring flexibility for future counter-cyclical policies and ensuring the sustainability of public debt levels. These efforts are designed to ensure sustainable economic growth, restore headroom for strategic policies, and keep public debt at manageable levels. This commitment is reflected in the decline of the general government’s gross debt-to-GDP ratio, which decreased to 81.6% in 2024-25 from a peak of 88.4% during the COVID-19 pandemic. Furthermore, the International Monetary Fund (IMF) anticipates a further decline to 76.9% by 2030-31, which highlights the nation's proactive approach to financial management.
Global Economic Trends
The global economic landscape is undergoing significant shifts, with trade's share in global GDP stagnating, indicating a movement away from hyper-globalization toward regionalization. This transformation presents vulnerabilities for emerging economies. Such trends may lead to rising costs and inefficiencies. Emerging markets, especially those within the Global South, are particularly susceptible, as they face amplified economic volatility and fewer opportunities for convergence. These factors are further complicated by geopolitical rivalries, protectionism, and the fragmentation of critical sectors like semiconductors, rare earths, energy, and pharmaceuticals, which are increasingly used as tools of influence, exacerbating vulnerabilities in dependent economies. India is navigating this complex environment by embracing a cooperative, rules-based global system while proactively forging partnerships to safeguard its national interests.
Growth Projections, Outlook
Despite encountering overlapping global shocks stemming from the COVID-19 pandemic, the Indian economy remains resilient and is expected to become the fastest-growing major economy worldwide. The Indian economy saw an average growth of 8.2% from 2021-22 to 2024-25, driven by private consumption and investment. The real GDP is projected to increase by 7.4% in 2025-26, according to the National Statistics Office. Furthermore, India is anticipated to contribute around 18% to global GDP growth in 2025-26, highlighting its significant influence in the global economy. India’s trajectory from 'Incredible India' to a 'Credible India' signifies its potential as a global economic powerhouse, as the nation capitalizes on its strengths and addresses any future challenges.
Key Government Reforms
The government has enacted significant reforms across multiple sectors, including taxation, financial architecture, labor regulations, and business facilitation. The implementation of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code, and the Real Estate (Regulation and Development) Act (RERA), along with the adoption of a flexible inflation targeting framework (which mandates the Reserve Bank of India to maintain inflation between 2-6%), are evidence of this commitment. The recent notification of the four labor codes aims to reduce regulatory complexities, encourage workforce formalization, attract investment, and generate more employment. These reforms are crucial for enhancing the flexibility of the labor market and improving wage protection and social security coverage, creating a more dynamic and inclusive economy. Through these initiatives, the government aims to create a business-friendly environment and foster sustainable economic development.
Strategic Government Schemes
The government's implementation of various schemes, such as production-linked incentives, the National Critical Minerals Mission, and the Electronic Component Manufacturing Scheme, are components of a larger strategy to build domestic capacities in critical areas and make India self-reliant. These schemes are not isolated initiatives but are designed to support a holistic strategy for long-term economic growth. The aim of these strategic investments is to bolster India’s manufacturing capabilities, reduce reliance on imports, and foster innovation within key industrial sectors. This comprehensive approach underscores the government’s commitment to building a robust and independent economy, capable of navigating global challenges and achieving sustainable growth. The strategic allocation of resources shows a commitment to long-term economic independence and competitiveness.
Harnessing Demographic Dividend
India's demographic dividend is a key advantage, that the government recognizes must be carefully managed and imaginatively harnessed to its full potential. Coupled with the nation's strong base of STEM talent, given India produces the highest number of engineers and science graduates globally, this offers considerable potential for the country. The government is positioning India at the forefront of a new technological revolution, particularly in the areas of technological innovation and artificial intelligence, machine learning, blockchain, space, and biotechnology and pharmaceuticals. Digital public infrastructure, the deepening financial inclusion, and the potential of AI are some of the multiple strengths that are coming together in a historic confluence, with policies adopted by the country creating favorable conditions for growth.
Navigating the Future
Addressing the challenges of an increasingly changing world order, India stands for a “co-operative and rules-based global system”. As key international institutions face difficulties in delivering on their mandates, India is proactively forging partnerships and strategies to secure its national interests in a world where power is becoming more dispersed. A combination of factors, including youthful demographics, expanding digital infrastructure, and technological advancements, are aligning to drive India's continued economic success. With the policies that the country has adopted, the wind is in our sails. India is indeed on the path to Viksit Bharat.
