India’s economic trajectory requires a bold reform agenda to achieve Prime Minister Narendra Modi’s vision of transforming the country into a developed nation by 2047. While ambition is commendable, matching it with decisive economic liberalization is essential to unlocking India’s vast potential.
The Financial Times editorial highlights concerns over India’s slowing growth. After a strong post-pandemic recovery, economic expansion has now decelerated for three consecutive quarters. Growth for the current fiscal year is projected at 6.4%—the slowest in four years. With a massive young workforce, India needs higher, jobs-rich growth to sustain long-term prosperity.
Domestically, high unemployment, food inflation, weak consumer spending, and sluggish investment are weighing on growth. Globally, rising trade tensions—exacerbated by former U.S. President Donald Trump’s tariff threats—have fueled uncertainty, leading to a record-low depreciation of the Indian rupee against the U.S. dollar.
Despite expectations for a roadmap to accelerate growth, last week’s budget fell short of delivering structural reforms. Finance Minister Nirmala Sitharaman’s measures, including tax cuts for the middle class and modest capital investment increases, provided some relief but left the informal sector—the majority of India’s workforce—largely untouched.
Encouragingly, the budget reduced tariffs on key sectors such as electronics and textiles, which could enhance manufacturing competitiveness. A newly announced committee to streamline bureaucratic red tape also signals a pro-business approach. However, the path to sustainable growth lies in deeper structural reforms, as emphasized by the Financial Times.
India’s rigid land and labor laws deter business expansion, making it difficult for companies to scale operations or attract global manufacturers looking to diversify supply chains. Further trade liberalization, reduced protectionist policies, and enhanced workforce training—especially targeting India’s low female labor participation—would provide long-term economic benefits.
While fiscal discipline remains a priority, political challenges could hinder reform efforts. Modi’s reduced parliamentary majority means navigating coalition politics carefully, and industry resistance to tariff cuts remains a potential roadblock. However, if India is to avoid the risk of “growing old before getting rich,” as the Financial Times warns, difficult but necessary decisions must be made to ensure robust, sustainable growth.
