As 2026 begins, the global economy is contending with persistent volatility, fractured supply chains and realignments in geopolitical power.
In this unsettled environment, India stands out – not as a passive observer of change, but as an economy deliberately positioning itself to shape outcomes.
The Union Budget 2026 reflects this intent, addressing immediate global uncertainty while strengthening the foundations for long-term growth.
With GDP growth projected at around 7% in the coming fiscal year, India continues to outperform most major economies.
This momentum is supported by resilient domestic demand, robust reform implementation, and expanding international partnerships.
At a time when global growth is uneven, and confidence remains fragile, India’s trajectory reinforces its role as a stabilising force in a fragmented world.
Macroeconomic strength with strategic direction
India’s macroeconomic fundamentals remain firmly anchored. Inflation is trending toward the Reserve Bank of India’s 4% target, the fiscal deficit is contained at 4.3% of GDP, and public finances are aligned to a clear medium-term objective of lowering the debt-to-GDP ratio to 50% by 2031.
Together, these indicators signal fiscal prudence, policy consistency and long-term credibility for investors.
More importantly, India’s policymaking reflects strategic clarity. Economic decisions are not merely defensive responses to global disruptions; they are designed to expand the country’s economic and geopolitical options.
This credibility is increasingly visible in India’s global engagement. Trade agreements with the European Union and the United States underscore India’s growing reputation as a reliable, forward-looking partner.
These arrangements go beyond tariff concessions, opening up avenues for technology collaboration, resilient supply chains, and innovation-led growth.
Initiatives such as the India Semiconductor Mission and SEMICON India further reinforce this direction, building domestic capability in high-value manufacturing.
Equally significant is the trade deal with the United States.
A closure on tariffs would not merely support bilateral trade; it would strengthen confidence in India–US economic alignment at a time when predictability in global trade is increasingly scarce.
From global participant to global shaper
India is steadily moving beyond participation to influence. Recent trade agreements with the UK, Oman, New Zealand, the EU and the US demonstrate India’s ability to work across economic blocs and political alignments.
Insights from the KPMG 2025 India CEO Outlook reflect this shift in sentiment domestically.
Indian CEOs remain optimistic, viewing geopolitical disruptions and supply chain risks as manageable rather than structural. Confidence in domestic demand, regulatory reform and long-term growth remains strong.
Unlike many economies forced into binary choices, India continues to maintain active partnerships with Western markets, the Global South and the Indo-Pacific.
This multi-aligned approach makes India increasingly indispensable in a divided world. The country is moving from being a rule-taker to a rule-shaper, setting new benchmarks in trade, digital governance and sustainability.
This shift is evident in India’s integrated approach to trade policy, climate action and technology investment.
Expanding trade corridors, record export performance, and advances in renewable energy, manufacturing, and digital infrastructure point to a nation in a purposeful transition.
India’s digital public infrastructure, now globally recognised, continues to enable inclusion at scale while attracting multinational companies to its market and talent base.
Building the foundations of future competitiveness
India’s demographic advantage is being actively translated into economic capability. Since 2014, more than 60 million individuals have been trained under the Skill India Mission.
Over 400 technology-focused courses spanning AI, cloud computing, cybersecurity and semiconductors have been launched to support next-generation industries.
Policy measures are also catalysing private investment. The datacenter tax holiday announced in the 2026 Budget is accelerating digital infrastructure expansion and supporting India’s ambitions in cloud, AI and data-driven services.
Technology is now central to India’s growth narrative. Over 6 million people are employed in tech and AI-led sectors, with 89% of startups in 2024 leveraging AI.
Under the India AI Mission, artificial intelligence is expected to contribute nearly USD 1.7 trillion to the economy by 2035, supported by the deployment of over 38,000 GPUs and a growing framework for responsible AI adoption.
At the same time, India is strengthening its industrial base. Six semiconductor fabrication plants have been approved with significant research funding, targeting a position among the world’s top five semiconductor hubs by 2030.
Production-linked incentive schemes and logistics reforms are integrating India deeper into global value chains, translating into USD 22 billion in investments, USD 200 billion in new production and 1.26 million jobs by September 2025.
Greater clarity on tariffs with the United States would further strengthen India’s investment case – particularly in advanced manufacturing, electronics, semiconductors and clean energy.
Reduced uncertainty at the border encourages long-term commitments and accelerates India’s integration into global and US-led supply chains.
Sustainability remains a parallel priority. More than half of India’s installed power capacity now comes from non-fossil fuel sources, reinforcing that growth and energy transition can advance together.
A defining decade ahead
India’s ascent is being driven by advanced manufacturing, digital innovation, clean energy and strategic economic diplomacy.
Few developments capture this convergence more clearly than the resolution of tariff-related issues with the United States.
A durable trade understanding would signal a shift from episodic negotiation to long-term partnership, anchored in trust, scale and shared competitiveness.
The coming decade will test India’s ability to convert ambition into execution.
Sustained leadership will depend on how well global partnerships are linked to domestic capacity-building and how reforms adapt to evolving needs for capital, technology, and talent.
India’s success will depend on expanding manufacturing output and reinforcing global value chains in a fragmented world, and its stability will be built through consistency, credibility and collaboration.
With deeper integration into US and global markets, greater clarity on trade and tariffs, and a steady reform trajectory, India is already positioned not just as a growth engine but as a co-architect of the next phase of global economic transformation.
Disclaimer: The author of this article is Yezdi Nagporewalla, CEO, KPMG in India. This story is for educational purposes only. The views and recommendations expressed are those of the author, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.