India: A Driver of Global Growth

By Sanjeev Oak

India’s festive season is once again proving to be a catalyst for economic growth. During this year’s Diwali season, the country has recorded a staggering turnover of ₹60,000 crores ($7.2 billion), with projections indicating record-breaking numbers in the coming days. With a growth rate of 7.5%, India has contributed a remarkable 16% to global economic growth this year, cementing its role as a driver of the global economy.

Diwali, the festival of lights, continues to illuminate India’s economy. Consumer spending during this season, bolstered by the expansion of e-commerce, has significantly contributed to the nation’s growth trajectory. According to a recent report, the ₹60,000 crores turnover during Diwali could potentially cross ₹1 lakh crore ($12 billion) post-celebrations. Retail, automotive, and consumer goods sectors have particularly benefited, signaling “achhe din” (good days) for the Indian marketplace.

The World Bank’s revised growth estimate for India stands at 7.5%, placing it among the fastest-growing economies globally. As India marches toward becoming the world’s third-largest economy in the next five years and aims to establish itself as a developed nation by 2047, its steady progress has gained international attention.

India’s Role as a Global Growth Engine

In 2023, India contributed 16% to global growth, a testament to its rising influence on the world stage. While global growth remains sluggish at 3.2%, India’s robust expansion highlights its pivotal role as a growth engine. Massive infrastructure projects, including the Sagarmala initiative to enhance port connectivity and the Smart Cities Mission, have laid a strong foundation for sustained development.

A decade ago, India’s adoption of biometric-based identification through Aadhaar set the stage for a robust digital economy. Today, the nation is reaping the benefits, emerging as a global hub for innovation and technology-driven services. With defense production surpassing ₹1 lakh crore ($12 billion) and exports exceeding ₹16,000 crores ($1.9 billion) last year, India is transforming from one of the largest importers to a significant exporter of defense equipment.

Infrastructure Investment and Economic Boost

Under Prime Minister Narendra Modi’s leadership, the government has maintained a decade-long focus on policy precision and momentum. In the first 100 days of its third term, projects worth ₹15 lakh crore ($180 billion) have been initiated. Among these, a ₹76,000 crore ($9 billion) port at Vadhavan is set to join the ranks of the world’s top 10 ports, further enhancing India’s logistical capabilities.

Diwali’s economic impact underscores the vital role of festivals in stimulating economic activity. This festive season is expected to lead to ₹1 lakh crore ($12 billion) in turnover, reflecting a healthy and expanding economy.

Smartphones Drive Growth

Smartphone sales have surged by an estimated 25% during Diwali, highlighting a growing demand for technology across urban and rural India. While 5G technology is yet to achieve full nationwide coverage, its rollout in select cities has spurred interest in 5G-compatible devices. India’s massive population, now over 1.4 billion, represents an unparalleled market for smartphone manufacturers. Last year, India sold 168 million smartphones, and this number is expected to reach 200 million units in 2023.

With smartphones priced between ₹10,000 and ₹30,000 ($120–$360), the Indian market caters to diverse consumer needs. Additionally, India exported approximately $10 billion worth of smartphones in 2022-23, positioning itself as a key global supplier. Major brands like Apple and Samsung are now producing devices labeled “Made in India,” with exports expected to reach $50 billion by 2025-26.

Global Implications of India’s Growth

India’s economic growth is not confined to its borders—it fuels global progress. From smartphone exports to defense production, India’s expanding industries contribute to worldwide supply chains. As the nation’s domestic production rises and government initiatives like “Make in India” gain momentum, India’s integration into the global economy continues to strengthen.

India’s journey is one of shared growth. As the nation’s economy expands, it uplifts global markets, fosters international collaboration, and ensures a brighter future for all.