As the BJP-led NDA government, or Modi 3.0, completes one year in office on June 9, sceptics have been silenced. Mega initiatives have been taken by the government without any visible cracks, even on sensitive issues, including the controversial Waqf (Amendment) Bill, 2024.

Major decisions have been taken on the economic front as well. More than a dozen projects have been announced in the last one year by the Union Cabinet across sectors, entailing economic benefits to the tune of ₹4 lakh crore. India’s economy, the fastest growing in the world, continues to remain stable with mega investments lined up in infrastructure, semiconductors, and sunrise sectors.

The government has also showcased its strength in defence by clamping down on terror outfits based in Pakistan and Pakistan-occupied Jammu and Kashmir in the wake of the Pahalgam attack. Indian forces destroyed some Pakistani airbases, establishing a new normal that terror strikes will be akin to a war on the nation.

Macroeconomic stability

That said, the Indian economy has remained largely stable over the past one year, even in the wake of global tremors emanating from America’s Liberation Day tariff tantrum, which kicked off on April 2, 2025, with “reciprocal tariffs”, but waned soon as the Trump administration pressed the pause button, given the retaliation from China.

Also, fears of a spike in inflation, a growth slump, and recession, along with the non-compromising stand of the U.S. Federal Reserve on monetary easing, led the Trump administration to renegotiate a trade deal with China, which has now been sealed.

The only fallout for India in the build-up to the MAGA (Make America Great Again) din of Donald Trump has been foreign institutional investor (FII) outflows and the subsequent hammering of the rupee. FIIs pulled out a net ₹1.27 lakh crore in FY25, of which ₹1 lakh crore was offloaded between September 2024 and March 2025. From a high of 83.47 against the dollar on September 20, the rupee fell to 85.55 on May 20, after touching a low of 87.78 on February 7, despite minimal intervention by the Reserve Bank of India. The good news, however, is that the country’s foreign exchange reserves have risen to a seven-month high of $690.6 billion as on May 9, 2025.

The growth engine is also running at a fast pace.

According to data released by the Ministry of Statistics, real GDP growth in Q4FY25 accelerated to 7.4%, against 6.4% in Q3. The economy expanded by 6.5% in FY25, compared with a 9.2% growth in FY24. The second advance estimates for FY25 had projected a real GDP growth rate of 6.5%, and a nominal growth rate of 9.9%.

The government expects the economy to grow in the range of 6.3% to 6.8% in the longer term. Chief economic advisor V. Anantha Nageswaran pointed to silver linings on the macroeconomic front in his address at the CII Annual Business Summit. “Energy prices are much lower. Regardless of how the tariff numbers will play out after 90-day expiration from the Liberation Day, there will be some sectors where India did not enjoy an advantage before, but may enjoy an advantage later from the tariff perspective,” Nageswaran said. “Progress of monsoon is good and there is an expectation that it will be above average, and it is likely to be well distributed.”

The momentum in the economy picked up in Q4FY25, and is continuing in Q1FY26, Nageswaran said after the release of the latest GDP numbers. “This is a good sign.”

Consulting firm Deloitte is bullish on the momentum and the “inherent strength” in the economy, evident from the upward revision of the 2023-24 GDP growth rate to 9.2% (the highest in 12 years), compared with 8.2% estimated earlier. “The optimism is carried forward, as we see a good jump in high-frequency indicators such as the Goods and Services Tax (GST), auto sales, and sales of fast-moving consumer goods in recent months,” it says in its India Economic Outlook 2025.

The Scorecard

One year of Modi 3.0: Big bets on infra, jobs, and reforms fuel the march to Viksit Bharat