Current Affairs - Economy

The FDI inflow during the first half of FY 2025-26 reached $50.36 billion, marking a 16% increase over the $43.37 billion received in the same period the previous year. This growth represents the highest-ever FDI recorded for the first half of any fiscal year in India. Alongside this rise, the government also pointed to stronger repatriation patterns, an increase in outward direct investment, and the expansion of India’s network of free trade and preferential trade agreements. Major pacts such as the EFTA agreement, which promises large investment commitments and job creation, further reflect the country’s expanding global economic engagement.

The figure 8.5% represents the year-on-year growth in Aadhaar authentications during November 2025, marking the highest monthly authentication volume of the fiscal year at 231 crore. This growth reflects the increasing reliance on Aadhaar-based digital infrastructure across various sectors. A major factor in this surge was the rapid adoption of face authentication, which accounted for nearly 60% of pensioners’ Digital Life Certificates, demonstrating how technology is aiding service delivery. Additionally, the rise in e-KYC usage to 47.19 crore transactions underlines Aadhaar’s expanding role in banking and financial services, further contributing to the overall growth momentum.

India’s economy recorded a robust GDP growth of 8.2% in the second quarter of FY26, driven primarily by strong performance in the manufacturing, construction, and services sectors. Manufacturing grew by 9.1%, construction by 7.2%, and services by 9.2%, reflecting broad-based recovery. The increase in Private Final Consumption Expenditure (PFCE) by 7.9% also contributed to the overall growth, signaling improving consumer demand. This marks a significant rise from 5.6% in Q2 FY25, indicating accelerated economic activity. The real GDP in Q2 FY26 stood at ₹48.63 lakh crore, demonstrating the economy’s resilience and strength across sectors.

Moody’s projects India to achieve a 7% GDP growth rate in 2025, making it the fastest-growing economy among emerging markets and the Asia-Pacific region. This growth is fueled by strong domestic demand, including sustained private consumption, robust investment activity, government infrastructure initiatives, and expanding manufacturing and services sectors. Despite global uncertainties and currency fluctuations, India’s economic fundamentals remain resilient, supported by corporate financial discipline and access to international capital markets. The 7% growth rate highlights India’s strategic edge and consistent performance compared to regional peers, positioning it as a leader in emerging market growth.

The International Monetary Fund (IMF) projects India’s GDP growth at 6.6% for the fiscal year 2025–26, reflecting strong domestic demand, strategic reforms, and resilience against global economic uncertainties. This comes after a 6.5% growth in FY 2024–25 and a robust 7.8% expansion in Q1 of 2025–26. Key factors supporting this growth include GST reforms, which improve tax compliance and fiscal stability, as well as public infrastructure investment, digital transformation, and formalisation of the economy. Structural reforms in labour, land, education, health, and finance are also expected to sustain long-term growth.