India keeps pace, world lags 

September 18, 2025

India is set to retain its position as the world’s fastest-growing major economy despite global market volatility, with gross domestic product projected to grow at 6.5 per cent in the current fiscal year (FY26), according to a new report by S\&P Global.

The report highlighted that India’s resilience is shaped by a combination of strong domestic buffers and external pressures. Comparing India’s performance with advanced economies, S\&P Global noted that while global shocks have occasionally created short-term disruptions, they have not diverted the country from its long-term growth trajectory.

The analysis credits structural reforms, infrastructure expansion and process improvements for strengthening India’s economic advantage over developed nations. These steps, it said, have laid the groundwork for sustained expansion while also creating opportunities to increase India’s role in global trade. Such integration, the report observed, will help attract capital, create employment and generate higher growth.

The study also pointed to the need for deeper reform and alignment between the central government, state administrations and the bureaucracy. Such coordination, it stressed, will be critical in ensuring India’s ambitions translate into tangible outcomes.

Private credit is emerging as another area of promise. According to S\&P Global, the sector is expected to expand significantly, bridging the financing gap left by traditional banks and benefiting from stronger domestic insolvency frameworks.

On the energy and industrial front, the report highlighted India’s strategy to localise the nuclear value chain by leveraging its large thorium reserves. Such efforts are seen as key to strengthening domestic capacity, promoting technology transfer and securing long-term energy stability.

The study also underscored India’s potential in shipbuilding. Currently holding less than one per cent of the global market, the nation aims to become one of the world’s top five shipbuilding countries by 2047. Achieving this goal, the report said, will be challenging but could significantly boost industrial growth and exports.

Digital transformation is another defining trend driving India’s growth story. With major investments flowing into data infrastructure, including new data centres, the country’s digital economy is expanding rapidly. S\&P Global projects that India will soon become the second-largest market in the Asia-Pacific region for data centre electricity demand, surpassing Japan and Australia within the next two years.

While uncertainties in the global environment remain, S\&P Global concluded that India’s ambitions are backed by reform momentum and strong domestic drivers, ensuring its position as the fastest-growing major economy in the world.