From bold structural moves like GST and the Production-Linked Incentive (PLI) scheme to investments in infrastructure, formalization of MSMEs, and the emergence of a robust startup ecosystem—the Modi government has aimed to reshape India’s economic landscape over the past 11 years. But has this vision translated into sustained industrial growth, global competitiveness, and inclusive development? This review takes stock of the progress made and highlights the opportunities and challenges that lie ahead on India’s path to becoming a leading global economic powerhouse.
The year 2025 marks 11 years of the NDA government under the leadership of Prime Minister Narendra Modi—a period marked by ambitious reforms aimed at energizing the economy, boosting business & investor confidence, formalizing the MSME sector, building best in class enabling infrastructure, nurturing a thriving startup ecosystem, advancing the agri and food processing industries, creating a unified market through GST reform, and strengthening India’s export capabilities. But it is logical to ask – What tangible impact have these structural reforms had on India’s economic trajectory and industrial growth over the past decade? Let us take a look.
India’s average GDP growth rate during 2014-25 has been around 6.1%, which is commendable amid significant global economic uncertainties, which demonstrates resilience and sustained momentum. According to the International Monetary Fund update, India’s growth is projected at 6.2% in 2025, which remains the highest among major economies. With a current GDP of US$ 4.2 trillion, the country stands poised to surpass Japan (world’s fourth-largest economy) by the end of 2025, according to the NITI Aayog.
Looking ahead, India’s economic outlook remains promising, with robust growth rates forecasted for the coming years. Proactive government interventions and strong structural foundations ensure resilience in the face of global challenges, further solidifying India’s position as a global economic powerhouse.
While the economy is gradually moving toward industrial and services-led growth, the agriculture sector has emerged as one of the most supportive sectors to the growth of India’s economy and is boosting economic resilience. The agriculture sector in India has grown at an average annual growth rate of 3.7% over the last decade, playing an important role in enhancing productivity and ensuring food security. India’s food grain production has touched a new record of 347 MMT in 2024-25, reflecting significant gains in both yield and cropping intensity.
The Indian processed food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. Over 20 times there is an increase in food processing capacity from 12 lakh metric tons in 2013-14 to 242 lakh metric tons in 2024-25. Proceed food product exports have also doubled from US$ 4.9 billion in 2013-14 to US$ 9 billion (April 2024 – Feb 2025), indicating enhanced competitiveness and scalability.
Source: IMF World Economic Outlook
India’s manufacturing sector is gradually emerging as a core pillar of growth, contributing around 14% to GDP in FY 2024–25. The government’s Production-Linked Incentive (PLI) schemes across 14 sectors—including electronics, white goods, food processing, pharmaceuticals, semiconductors, and electric vehicles—have attracted significant foreign and domestic investment amounting to Rs 1.46 lakh crore (US$ 17.5 billion) as of December 2024. Notably though, the impact of PLI is not uniform across sectors, with large-scale electronics manufacturing, pharmaceuticals, food processing, and telecom & networking products being significant contributors. Moreover, India needs to enhance its backward and forward linkages in manufacturing sector to increase the sector’s employment intensity.
The contribution of services to the total GVA at current prices stood at around 55% in FY ’25. For the FY 2025 (April to February), the total value of service exports was estimated at US$ 354.9 billion, reflecting a 14.1% increase compared to the corresponding period of the previous year.
However, the ability to climb up the value chain in services—particularly moving from IT support to AI-based software engineering, cyber security, and block chain consulting—will be vital for maintaining this growth. The focus should shift toward enabling deep tech ecosystems, reskilling the IT workforce, and integrating emerging technologies through public-private R&D investments.
India’s total exports reached an all-time high of US$ 824.9 billion in FY 2024–25, a substantial increase from US$ 466.22 billion in FY 2013–14, reflecting a sustained upward trajectory over the past decade. This export performance underscores a structural shift in India’s external sector, driven by diversification of export baskets, integration into global value chains, and rising competitiveness in sectors such as electronics, pharmaceuticals, food processing, engineering goods, and services.
The robust export momentum has also catalyzed deeper participation of Indian businesses—especially MSMEs—in global markets, enhancing both foreign exchange resilience and industrial capacity utilization. The recent signing of FTAs with key partners signifies a bold approach towards business competitiveness and accelerated growth.
Over the last eleven financial years (2014-25), India attracted FDI worth US$ 748.8 billion. In the recent year 2024-25, India received a total FDI of US$ 81 billion. This surge is indicative of policy liberalization across sectors and targeted initiatives, which have collectively enhanced India’s competitiveness in capital-intensive and innovation-driven industries.
As a case in point, India’s defence production reached a record value of ₹127,434 crore (US$ 14.81 billion) in FY 2023–24, marking a 174% surge from 2014–15, shows significant expansion and self-reliance in defence manufacturing. On the other hand, India’s defence exports have risen to Rs 23,622 crore in 2024-25 (US$ 2.74 billion) from Rs 1,940 crore (US$ 225.4 million) in 2014-15.
Start-ups are becoming employment-creating innovation ecosystems in India. India is home to Asia’s 2nd largest startup ecosystem, with more than 120,000 startups, and over 100 unicorns, highlighting the dynamic entrepreneurial ecosystem of the country. The persistent expansion of emerging industries, fueled by technological progress and shifting consumer preferences, emphasizes the need for increased investments to sustain growth momentum.
The Micro, Small, and Medium Enterprises (MSME) sector, comprising over 6.3 million enterprises, has developed into a robust component of India’s business landscape. This sector plays a crucial role in India’s overall exports, contributing around 49% to the nation’s export revenue, thereby underscoring its essential role in promoting international trade.
Overall, the past 11 years have marked a pivotal chapter in India’s economic history. The convergence of policy intent, institutional reforms, and market forces have propelled India toward becoming a future economic superpower. However, sustaining this trajectory and ensuring employment-led growth is expected to require continual recalibration, informed economic governance, accelerated infrastructural development, fast-paced skill development and greater institutional depth, especially if India aims to actually become a credible alternative to China. A critical area for India to compete in this technology-led era will be R&D depth and output. Spends on R&D remain at around 0.6-0.7% of GDP, compared to China (2.4%), which limits our ability to move up the value chain.
Conclusion
Under the NDA government (2014-25), India has witnessed notable economic transformation through structural reforms such as GST, PLI schemes, and infrastructure development. The country averaged 6.1% GDP growth, reaching a projected $4.2 trillion economy in 2025—poised to become the world’s third-largest. Agriculture remained resilient, while food processing and services sectors showed strong export-led growth. Manufacturing gained traction, yet job creation and value chain integration remain challenges. Startups and MSMEs flourished, contributing significantly to exports and employment. Defence production and FDI inflows surged, reflecting improved investor confidence. However, a number of sectors still struggle to attain global competitiveness.
Low R&D investment (0.6–0.7% of GDP vs. China’s 2.4%) constrains innovation and industrial competitiveness, and several sectors need sustained investments to grow. To sustain momentum and emerge as a credible alternative to China, India must enhance research capacity, strengthen industry-academia linkages, and push value-added manufacturing. The past decade has laid a solid foundation, but scaling global leadership will demand deeper reforms and innovation-led growth.
