The scale of the change is significant. Just a year before the Modi government assumed office, global financial institution Morgan Stanley had identified India as one of the “Fragile Five” emerging economies, citing concerns over currency vulnerability and twin deficits. More than a decade later, India has repositioned itself as one of the world’s most sought-after growth destinations.
India’s nominal Gross Domestic Product has approximately doubled over the past decade, rising from about 2.1 trillion dollars in 2015 to around 4 trillion dollars at present, representing growth of nearly 100 percent. The country has consistently remained among the fastest-growing major economies globally. Real economic growth for Financial Year 2026 was estimated at 7.7 percent, matching the strongest expansion recorded since Financial Year 2022. The fourth quarter alone registered growth of 7.8 percent.
A key feature of this growth has been macroeconomic stability. The government reduced the fiscal deficit from pandemic-era levels exceeding 9 percent of Gross Domestic Product to 4.4 percent in Financial Year 2026 and has set a target of 4.3 percent for Financial Year 2027. The revenue deficit narrowed to its lowest level since Financial Year 2009. Importantly, fiscal consolidation was achieved while maintaining investment spending and improving expenditure quality.
Public capital expenditure emerged as a major driver of economic expansion. Government capital spending increased from approximately 2 lakh crore rupees in Financial Year 2015 to a budgeted 12.2 lakh crore rupees for Financial Year 2027, representing a sixfold increase. Effective capital expenditure rose from a pre-pandemic average of 2.7 percent of Gross Domestic Product to around 4 percent. More than half of this allocation has been directed towards roads, railways, ports and waterways.
The government’s economic strategy has focused on creating both physical and digital infrastructure capable of attracting private investment. The Digital Public Infrastructure framework, including Aadhaar, Unified Payments Interface and Direct Benefit Transfer systems, has contributed to greater formalization of the economy, reduced welfare leakages and established a real-time payments ecosystem that is increasingly viewed internationally as a model for digital governance.
Despite these achievements, private investment has remained relatively subdued throughout much of the current economic cycle. Economists argue that private capital participation must increase substantially if the infrastructure and institutional foundations established over the past decade are to achieve their full economic potential.
The government’s broader industrial strategy has centered on expanding manufacturing capacity and reducing dependence on a services-led growth model. Through the Make in India initiative, Production Linked Incentive schemes and the policy emphasis on self-reliance, substantial public resources have been directed towards industrial development.
Electronics manufacturing has emerged as the most visible success of the Production Linked Incentive program. India has transitioned from being a major importer of mobile phones to becoming the world’s second-largest mobile phone manufacturer. Mobile phone production increased from 2.14 lakh crore rupees in Financial Year 2020 to 5.5 lakh crore rupees in Financial Year 2025. Exports expanded nearly eightfold during the same period, rising from 0.27 lakh crore rupees to 2 lakh crore rupees.
Overall electronics exports exceeded 47 billion dollars during calendar year 2025, marking a 37 percent increase compared to the previous year. Smartphones have now become India’s largest single export commodity. Across 14 sectors, the Production Linked Incentive program approved 836 applications, generated investments exceeding 2.16 lakh crore rupees and contributed exports valued at more than 8.3 lakh crore rupees.
The pharmaceutical sector has also recorded notable progress. Domestic manufacturing commenced for 191 bulk drugs, reducing dependence on imported active pharmaceutical ingredients, a vulnerability highlighted during the pandemic period.
However, significant challenges remain. The government’s objective of increasing manufacturing’s contribution to 25 percent of Gross Domestic Product has yet to be achieved, with the sector’s share remaining broadly similar to levels recorded a decade ago. While industrial capacity has expanded in selected sectors, broader manufacturing growth remains an ongoing objective.
Employment generation continues to be another major area of focus. The government reports that Production Linked Incentive schemes have created more than 14.4 lakh direct and indirect jobs, with the mobile manufacturing sector alone supporting approximately 12 lakh livelihoods. Nevertheless, these figures remain modest when compared with the millions of new entrants joining the workforce annually. The capital-intensive nature of modern electronics manufacturing means production growth does not necessarily translate into proportionate employment growth.
Overall, the economic record of the past twelve years reflects substantial structural transformation. India has achieved a doubling of Gross Domestic Product, maintained inflation control, reduced fiscal deficits without sacrificing investment, increased capital expenditure sixfold, established globally recognized digital infrastructure and laid the groundwork for a stronger manufacturing base. The long-term success of these reforms will ultimately depend on whether industrial expansion and private investment can translate into sustained employment generation and broader economic advancement.
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