India Remains Fastest-Growing Economy, Driven by Domestic Markets

India Emerges as Fastest Growing Major Economy with Strong Market Transformation: IMF​

India’s Growth Momentum Outpaces Global Peers​

New Delhi, March 14: India’s economy continues to outperform major global peers, supported by strong growth momentum and a gradual structural transformation in its capital markets.

According to the International Monetary Fund, India recorded GDP growth of 6.5 percent in FY2024 to 2025. The growth accelerated further in the first quarter of FY2025 to 2026, when the economy expanded by 7.8 percent.

At a time when several large economies are slowing and revising their growth forecasts downward due to policy uncertainties, India is maintaining a stronger trajectory. The IMF currently identifies India as the fastest growing major economy in the world, ahead of China, whose growth is projected at 4.8 percent.

IMF Projects Steady Expansion Despite Global Policy Risks​

The International Monetary Fund has projected real GDP growth of 6.6 percent for India for the full year, even under the assumption that tariff measures by the United States remain in place for an extended period.

Earlier this month, the IMF also said that India is expected to contribute about 17 percent to global real GDP growth in 2026, highlighting the country’s growing role in the global economic landscape.

Among other countries listed in the IMF’s top ten contributors to global growth, the United States is expected to account for 9.9 percent. Indonesia follows with 3.8 percent, while Turkey is projected to contribute 2.2 percent. Saudi Arabia is expected to add 1.7 percent, Vietnam 1.6 percent, and both Nigeria and Brazil are projected to contribute 1.5 percent each.

Domestic Participation Reshaping India’s Capital Markets​

India’s macroeconomic strength is also visible in the structural changes taking place within its capital markets.

The domestic mutual fund industry added around Rs 14 lakh crore to its asset base in 2025, pushing total assets under management to a record Rs 81 lakh crore by November.

Systematic Investment Plan contributions also climbed to a new peak. Annual SIP inflows reached Rs 3.34 lakh crore in 2025, rising from Rs 2.68 lakh crore in 2024 and Rs 1.84 lakh crore in 2023.

Historically, Indian equity markets were heavily influenced by foreign capital flows. However, rising domestic participation is gradually reshaping the market structure.

Despite this surge in participation, equity ownership in India remains relatively low. Around 15 percent to 20 percent of Indian households currently invest in equities and mutual funds, compared with participation levels of 50 percent to 60 percent in the United States, suggesting significant room for further expansion in domestic investment.