As Prime Minister Narendra Modi completes one year in his third term, India’s economy presents a mixed picture. On the positive side, the country’s GDP grew by 6.5% in FY 2024-25, thanks in part to a strong final quarter with growth exceeding 7%. This momentum has somewhat continued into the current fiscal year (FY26), supported by robust agriculture, resilient services, and modest gains in industrial output.

However, key economic challenges remain unresolved. Issues such as low private sector investment, sluggish urban demand, inconsistent rural revival, and household financial stress still linger. These domestic headwinds have been persistent despite over a decade of efforts by the BJP-led NDA government.

On the global front, new US tariffs have created uncertainty in trade and investment. While this could impact global capital flows and exports, it may also create strategic opportunities for India — such as benefiting from trade diversionand becoming a preferred alternative in global supply chains. Still, the road ahead is complex, especially with multiple ongoing trade negotiations and a challenging export environment.