Current Affairs - Economy

India’s foreign exchange reserves crossed the $700 billion mark in October 2025, reaching $702 billion according to the Reserve Bank of India (RBI). This milestone reflects strong macroeconomic fundamentals and resilience amid global financial volatility. The rise was largely driven by an increase of $6.1 billion in gold reserves, supported by higher global gold prices, even as foreign currency assets declined due to RBI’s market interventions. Maintaining such high reserves provides India with a crucial financial cushion against global uncertainties, stabilises the rupee, enhances investor confidence, and ensures sufficient import cover for over ten months, reinforcing economic stability.

Deloitte India’s latest India Economic Outlook report projects India’s GDP growth for FY26 in the range of 6.7–6.9%, reflecting confidence in the country’s strong domestic demand and supportive policy environment. The upward revision of 0.3 percentage points from earlier estimates highlights renewed optimism in the Indian economy. Key drivers include robust private investment, rising consumer spending, and government-led reforms such as GST 2.0. The projection aligns closely with the Reserve Bank of India’s 6.8% growth forecast, emphasizing a broad consensus on India’s economic resilience despite challenges like global trade uncertainty, inflation pressures, and geopolitical risks.

In September 2025, India’s Infrastructure Output, measured by the Index of Eight Core Industries (ICI), registered a growth rate of 3% year-on-year. This indicates moderate expansion in the infrastructure sector, driven by positive growth in key areas such as steel, cement, electricity, and fertilizers. Although the growth rate was lower than August’s revised figure of 6.5%, it still reflects ongoing momentum in core industrial activity, contributing to the overall economic stability and infrastructural development of the country.

India’s Female Labour Force Participation Rate (FLFPR) has risen significantly from 23% in 2017–18 to 42% in 2023–24. This increase reflects a major improvement in gender inclusion and economic participation for women in the country. Over the past decade, India recorded the sharpest rise in women’s labour force participation among BRICS nations (Brazil, Russia, India, China, South Africa). The growth highlights ongoing social and economic reforms, initiatives to promote women’s employment, and broader efforts to create an inclusive workforce that supports sustainable economic development and reduces gender disparities in the labour market.

The International Monetary Fund (IMF) has revised India’s GDP growth forecast for 2025 upward to 6.6%, reflecting stronger-than-expected economic performance in the first quarter of the year. This revision accounts for robust domestic demand in consumption and services, policy continuity, and infrastructure investments, which helped offset the impact of newly imposed US tariffs. Despite external trade pressures, India’s economy maintained momentum due to these factors. However, the IMF has slightly reduced the 2026 forecast to 6.2%, citing potential delayed effects of tariffs, global economic uncertainties, and risks related to trade tensions.