The recent economic data projecting India’s GDP growth rate for FY 2026–27 at 7.0 per cent by the RBI is a good indicator of its economic prowess, as it is way ahead of all the G20 nations, including Germany, Brazil, and China. The IMF has earlier indicated India’s growth at 6.3 per cent in 2026, which also augurs well for its further economic prospects, maintaining a lead over other economies of the world.
Renowned strategic affairs expert K. Subrahmanyam said that security does not only mean the protection of a country from internal and external threats, but also ensuring that the country is industrialised rapidly and has a cohesive, egalitarian, and technological society. The role of trust creation and a process of good governance in a multicultural society like India provide the vital bond that can create miracles. India has that bond very well intact.
Even as major economies of the world witnessed a slowdown, economic growth has remained resilient in India. However, a major concern for India has been to create more employment. Rapid globalisation has brought forward a new syndrome of “perform or perish.” Surely, this syndrome is affecting public sector enterprises and businesses around the world.
Although the abundance of cheap labour and the initiative towards FDI (foreign direct investment) have made certain economies promising prospects, the strong foundation and tremendous trust generated by Indian banking, and public and private sector units, have provided a much-needed impetus. Although initially India was not very aggressive in its economic reforms, it gradually started creating an inner web of confidence-building measures to provide not only economic growth but also ensure the development of each section of society, thus coming out with a framework of socio-economic justice that helped in building trust.
Also, by catching on to export-oriented special economic zones, the country soon started enhancing world trade, which was in the beginning hardly 0.7 per cent. The process of strengthening a medium-term export strategy proved to be a strategic effort for India during 2002–2007. Besides, the reforms of 1991 gave another boost to the Indian economy.
Although FDI is considerably higher in certain East Asian tigers and China, the investment returns are far greater in India due to its superior corporate pattern of clean governance and the high quality of commercially driven companies. Numerous Indian business experts and investors have carved a niche for themselves overseas, particularly in the fields of information technology, biotechnology, pharmaceuticals, and healthcare, where even advanced countries still need to catch up.
The recent Indo–US Bilateral Trade Agreement on critical technologies and industrial collaboration, and the commendation for PM Shri Narendra Modi by US President Donald Trump, serve as significant indicators of optimism, establishing a substantial platform for India and the US to forge closer ties and open up further avenues for economic development. Besides, the reduction in US tariffs from 25 to 18 per cent may give a further push to a positive environment. Additionally, India might participate in Pax Silica, a US initiative aimed at establishing a seamless global supply chain of silicon and other critical minerals for AI technology.
India’s indigenous entrepreneurs and industries certainly give it a huge advantage over the higher levels of FDI in other leading economies of the world. For example, Chinese export-led manufacturing progress is mainly based on FDI, which is hardly a substitute for home-grown entrepreneurship. India’s strength lies in creating its internal markets, as it already has a fast-growing middle class.
Financial dealings are not as simple as they appear and require constant monitoring by competent authorities. The malfunctioning of the financial system in Japan during the last couple of years turned out to be pernicious for the country. This problem can be compounded by the lack of mature markets, which are at times depressed and sometimes buoyant for no apparent reasons. Besides, India has brought forward all necessary requisites required for a good, business-friendly environment for investors across the globe.
Undoubtedly, China’s high saving rate, good infrastructure, and competitive manufacturing are notable, but these cannot be compared with India’s services-driven industry prowess and its institutional stability, deeply interwoven with pluralism and democracy. India has also made magnificent strides in a number of areas, including knowledge- and skill-based intensive services in telecommunications and scientific and technological innovation.
India is also emerging as the first choice for foreign investors, who are gradually pumping in huge amounts—more than $60 billion—into the Indian stock markets, with about 260 new foreign investors having registered with the stock market regulating body (SEBI) during the last two decades. The stupendous progress of India in the IT industry has opened a new era of Indian companies aggressively capturing overseas markets, and even the US has begun to realise this.
The ambit of compliance and regulatory authorities also provides economic security, as nothing goes undetected, and this is something to learn from. Foreign investor sentiments can further be enhanced by creating permissible ease in tax rates and existing protocols without compromising security.
On the other hand, recent Indo–US and Indo–EU deals will be quite helpful in providing new channels of economic growth and attracting substantial investment into India. In addition to this, cooperation in the Communications, Information Security Memorandum, Basic Exchange and Cooperation Agreement, and Initiative for Critical and Emerging Technologies between India and the US, and India and the EU, will further enhance mutual coordination and lead to significant advancements in communication capability and the management of security arrangements to deal with threats from international terrorism. This would help in generating prudence to anticipate forebodings about possible threats from either state or non-state actors.
The recent Indo–US deal has already created a perfect platform for the Communications Compatibility and Security Agreement to facilitate cooperation between the security and defence establishments of the two largest democracies in the world. The US and India have a lot to share with each other, as approximately five million Indians contribute to the US economy directly or indirectly, either through employment or by studying at different US universities. Besides, there has been huge investment by numerous companies in each other’s countries, creating new trade partnerships and accelerating mutual growth.
Recently, there has been a revolution in the process of opening start-ups, as they have crossed the landmark of more than ten thousand, providing a huge impetus to employment generation during the last five years alone. According to a recent report by NASSCOM, the robust start-up strategy has created more than one lakh direct and indirect jobs. By enhancing its operational and support network, ranging from rural to urban areas, India has ensured a much higher rate of return on assets.
India has also made remarkable strides in a number of areas, including knowledge- and skill-based intensive services such as telecommunications, pharmaceuticals, biotechnology, and professional services of doctors, teachers, and management professionals. In addition to this, as many as 600 new investors were granted permission to trade on Indian stock exchanges, consequently leading to 125 per cent growth in the Sensex and a 148 percent rise in the Bombay Stock Exchange.
The ambit of compliance and regulatory authorities also provides economic security, as nothing goes undetected. Foreign investor sentiments can further be enhanced by creating permissible ease in tax rates and existing protocols without compromising security. Doing so would not only save paperwork, taxes, and time for the typical investor but also further ease their decision to choose India as a preferred business destination.
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