Usman Salis
India's economy is making headlines for an unusual reason—it's achieving what few major economies can: robust growth alongside remarkably low inflation. The IMF recently upgraded India's growth forecast to 6.6% for FY26, crowning it the world's fastest-growing major economy. At the same time, retail inflation dropped to just 1.5% in September 2025, the lowest in nearly a decade. This combination is turning heads among investors and policymakers worldwide, positioning India as a standout performer in an otherwise sluggish global economy.
Leading the Global Growth Race
The IMF's October 2025 outlook paints a clear picture: India is outpacing everyone. Growth is expected to hit 6.5% in 2024 and climb to 6.6% in 2025 before easing slightly to 6.2% in 2026. Compare that to the United States at 2.0%, China at 4.8%, or the broader emerging markets average of 4.2%, and India's momentum becomes obvious. The country's fiscal year projections tell a similar story, with 7.0% growth in FY2025 and 6.1% in FY2026. No matter how you slice it, India is pulling ahead.
India's current trajectory has earned plenty of praise. Policymakers, including voices like Dr. Sudhanshu Trivedi, point to strategic leadership and structural reforms as key drivers. But the real test lies ahead. Oil price volatility, geopolitical tensions, and global economic headwinds could all disrupt this balance. Maintaining fiscal discipline and continuing reforms will be essential if India wants to keep this momentum through 2026 and beyond.
Inflation Cools to Near-Decade Low
While growth accelerates, prices are doing the opposite. September's headline CPI of 1.5% marks the lowest inflation rate in roughly eight years. The drop was driven largely by food, with vegetables down 21.4%, pulses falling 15.3%, and spices dropping 3.1% year-over-year. Rural areas saw even sharper relief, with inflation at just 1.1% compared to 2.1% in urban centers. Core inflation has also softened, giving the Reserve Bank of India breathing room to potentially cut rates as soon as December, according to analysts.
Charts tracking these trends reveal something striking: India's GDP growth line keeps climbing while inflation, which hovered above 6% in 2023, has plummeted well below historical averages. This isn't just a good quarter—it's a fundamental shift that's catching global attention. High growth paired with low inflation is rare anywhere, let alone in a large emerging market. It's creating a compelling case for international investors looking for stable, high-return opportunities.
Usman Salis
