India continues to emerge as the fastest-growing major economy in the world, maintaining strong growth momentum even as several large economies face slowing expansion and policy uncertainties, according to recent data and projections from the International Monetary Fund.
Economic data released by the IMF shows that India recorded gross domestic product growth of 6.5 per cent during the financial year 2024–25. The growth momentum continued into the next fiscal year, with the economy expanding by 7.8 per cent in the first quarter of 2025–26.
The global financial institution has projected India’s real GDP growth at 6.6 per cent for the full fiscal year, maintaining its position as the world’s fastest-growing major economy. The projection holds even under the assumption that tariff measures imposed by the United States remain in place for an extended period.
The IMF has also estimated that India will account for a significant share of global economic expansion in the coming years. According to the institution’s assessment earlier this month, India could contribute about 17 per cent to global real GDP growth by 2026, reflecting the country’s increasing weight in the global economy.
The projection places India ahead of several large economies that are currently experiencing slower growth rates. China, for instance, is expected to grow at around 4.8 per cent, placing it behind India in terms of expansion among major economies.
Other countries projected to contribute to global economic growth include the United States, which is expected to account for 9.9 per cent of global real GDP growth. Indonesia is projected to contribute 3.8 per cent, followed by Turkey with 2.2 per cent. Saudi Arabia is expected to contribute 1.7 per cent, while Vietnam’s contribution is estimated at 1.6 per cent. Nigeria and Brazil are each projected to contribute around 1.5 per cent.
India’s macroeconomic performance is also reflected in the structural changes taking place within the country’s capital markets. Increased domestic participation and strong investor activity have begun to reshape the financial ecosystem.
The domestic mutual fund industry witnessed significant expansion during 2025. Assets under management in the sector increased by around Rs 14 lakh crore during the year, taking the total AUM to approximately Rs 81 lakh crore by November.
Investor participation through systematic investment plans also recorded substantial growth. Annual SIP contributions reached a record Rs 3.34 lakh crore in 2025. This represents a steady rise from Rs 2.68 lakh crore recorded in 2024 and Rs 1.84 lakh crore in 2023.
Financial analysts note that Indian equity markets were historically influenced largely by foreign capital flows. However, the growing role of domestic investors is gradually changing the dynamics of the market and strengthening internal capital formation.
Despite the recent surge in investor participation, the overall penetration of equity investments in Indian households remains relatively limited. Current estimates indicate that only about 15 to 20 per cent of households in India invest in equities or mutual funds.
This level of participation remains significantly lower than that of the United States, where roughly 50 to 60 per cent of households participate in equity markets. The difference indicates that India still has substantial scope for expanding domestic investor participation.
The continued growth of the Indian economy, combined with increasing domestic financial participation, reflects a broader structural shift in the country’s economic landscape as it strengthens its role in global economic growth.
