Current Affairs - Economy

India’s Index of Industrial Production (IIP) recorded a 3.5% year-on-year growth in July 2025, improving from 1.5% in June 2025. The growth was primarily driven by a strong 5.4% rise in manufacturing, which offset a sharp -7.2% decline in mining. Electricity output saw a marginal rise of 0.6%. Within manufacturing, sectors such as basic metals, electrical equipment, and non-metallic mineral products showed notable increases, with growth rates of 12.7%, 15.9%, and 9.5% respectively. This industrial performance highlights resilience in key sectors like infrastructure and consumer goods, reflecting positive momentum in India’s overall economic landscape.

India is projected to become the world’s second largest economy in purchasing power parity (PPP) terms by 2038, with an estimated GDP of USD 34.2 trillion. This milestone will be driven by multiple factors including a youthful demographic profile, strong domestic demand, and high savings rates that fuel capital formation. Additionally, India’s declining debt-to-GDP ratio, coupled with structural reforms such as GST, IBC, UPI-led financial inclusion, and production-linked incentives, will support sustainable growth. Investments in infrastructure, renewable energy, and emerging technologies further strengthen this trajectory, positioning India as a global growth engine and a key player in the future economic landscape.

India’s trade with Africa reached a historic milestone of over USD 100 billion in 2024–25, reflecting deepening economic and strategic ties between the two regions. This achievement nearly doubles the USD 56 billion recorded in 2019–20, underscoring rapid growth in commerce and investment. India has invested more than USD 75 billion in Africa since 1996, positioning itself among the continent’s top five investors. Beyond trade, India has extended concessional loans, grant aid, and thousands of scholarships to African students. These efforts, coupled with collaboration in renewable energy and disaster resilient infrastructure, showcase a strong and expanding partnership rooted in mutual development.

India’s seafood exports for FY2024–25 recorded a total value of USD 7.45 billion, reflecting a slight increase from USD 7.38 billion the previous year. Despite the growth in value, the overall export volume declined to 16.98 lakh tonnes from 17.81 lakh tonnes, showing challenges in international market demand and supply chain dynamics. Frozen shrimp continued to dominate, contributing USD 5.17 billion and nearly 70% of the total earnings, consolidating India’s global leadership in shrimp exports. The United States remained the largest buyer, followed by China, the European Union, Southeast Asia, Japan, and the Middle East, highlighting India’s wide-reaching seafood trade network.

India suspended the 11% cotton import duty until September 30, 2025, as a relief measure for its garment and textile industry. This sector, which employs millions, has been under pressure from high input costs and growing competition from countries like China, Bangladesh, and Vietnam. The duty suspension reduces raw material costs, giving exporters breathing space to remain competitive in global markets. Additionally, the move benefits U.S. cotton growers by expanding their market access in India. It also serves as a diplomatic gesture to ease trade tensions with the U.S., while reinforcing India’s role in the global textile supply chain.