Current Affairs - Economy

The Index of Industrial Production recorded a growth of 6.7% in November 2025, which was the highest level seen in the past 25 months. This 6.7% expansion was mainly driven by a strong recovery in manufacturing and a sharp rise in capital goods output. Higher manufacturing activity reflected improved demand, increased production, and better capacity utilization. At the same time, strong capital goods growth indicated renewed investment momentum in the economy. Overall, the 6.7% IIP growth highlighted improving industrial health and strengthening economic resilience in India.

India achieved a major economic milestone in 2025 by becoming the world’s fourth-largest economy in nominal GDP terms. With a GDP valued at $4.18 trillion, India moved ahead of Japan, which had long been among the top global economies. This achievement reflects strong domestic consumption, sustained structural reforms, rising investment activity, and robust GDP growth rates. Accelerating quarterly growth and positive projections from international institutions further underline India’s economic momentum. Surpassing Japan also signals a broader shift in global economic power toward emerging economies and strengthens India’s role in global economic decision-making.+

India’s eight core industries registered an overall growth of 1.8% in November 2025, reflecting modest but steady industrial expansion. The growth was mainly driven by strong performance in construction-linked sectors such as cement and steel, along with positive contributions from fertiliser and coal production. However, declines in crude oil and natural gas output moderated the overall growth rate. Since these core industries account for over 40% of the Index of Industrial Production (IIP), their performance plays a crucial role in shaping broader industrial trends and indicates continued resilience in infrastructure-related economic activity despite challenges in the energy sector.

India’s net direct tax collections recorded an increase of 8% during FY26 up to 17 December 2025, indicating steady revenue growth for the government. This 8% rise was driven primarily by strong corporate tax collections and a significant reduction in tax refunds, which helped raise net receipts. Improved compliance, better advance tax payments, and stable business activity also played an important role. The 8% growth reflects the positive impact of tax administration reforms and economic resilience, supporting fiscal stability and providing the government with greater capacity to fund public expenditure and development initiatives.

The Asian Development Bank committed $4.26 billion in sovereign lending to India in 2025, marking a significant contribution to the country’s inclusive and sustainable development agenda. The funding supports a wide range of priority sectors, including skill development through ITI modernization, expansion of renewable energy via rooftop solar projects, urban infrastructure upgrades, metro and rapid rail expansion, healthcare improvements, and ecotourism development. This financial support aligns with India’s long-term growth strategy and reflects the Asian Development Bank’s role as a key development partner, focusing on clean energy transition, urban transformation, and human capital development.