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India's economic outlook remains optimistic despite global headwinds, with Deloitte South Asia CEO Romal Shetty predicting a 7% growth rate for the current fiscal year (FY25). This positive forecast comes amidst a gloomy global economic landscape, making India a beacon of resilience. Shetty attributes this growth to factors such as inflation being under control, a revival in rural demand, and an improvement in vehicle sales.
While acknowledging the impact of global challenges such as the geopolitical crisis in the Middle East and Ukraine, and the slowdown in Western economies, Shetty emphasizes India's strong position. He notes that the country's GDP growth will be affected but not completely decoupled from global trends. Deloitte projects a 6.7% growth rate for the next fiscal year (2025-26), following the 8.2% growth achieved in the previous fiscal year (2023-24).
Shetty anticipates that the Modi 3.0 government will continue its economic reforms, including privatization, at a sustained pace. He highlights the government's commitment to efficiency and action within departments. India's ambition to become the world's third-largest economy by the end of the decade is fueled by its status as the world's fifth-largest economy, aiming to reach a USD 5 trillion GDP. The decline in oil prices, a positive factor for India as a net importer, coupled with potential US Federal Reserve rate cuts, further contribute to a favorable economic environment.
Shetty emphasizes India's position as the future services capital of the world, advocating for technological advancements in agriculture to boost productivity. He underscores the need to identify niche areas where India can achieve global dominance. Addressing the question of India attaining developed nation status by 2047, Shetty points to the need for a significant increase in per capita income, from the current USD 2,500 to USD 20,000. He believes that a per capita income of USD 5,000 would trigger a substantial increase in domestic consumption, transforming the economy and promoting self-reliance.
Source: India to clock 7% growth in FY25 despite headwinds, Deloitte South Asia CEO says