December 17, 2025
India rose from the ninth-largest to the fifth-largest economy globally between 2010 and 2024, driven by reforms and demographics
Inflation moderated sharply over the period, enabling lower interest rates and greater macroeconomic stability
The rupee depreciated steadily despite RBI support, reflecting structural trade and inflation pressures
Indian equities delivered a 10.4% CAGR over 15 years, supported by domestic structural strengths
Over the past 15 years, India has climbed from the world’s ninth-largest economy to the fifth-largest by 2024, measured by GDP at constant US dollar prices, according to World Bank data. This rise has been underpinned by favourable demographics, sustained structural reforms and a deliberate push to strengthen long-term growth drivers across sectors.
A demographic dividend, strong expansion in services and sustained public investment in infrastructure have played central roles in this transformation. Reforms such as the rollout of the Goods and Services Tax, rapid digitalisation, financial inclusion initiatives, and a renewed manufacturing focus through Make in India and the Production Linked Incentive scheme have reinforced India’s steady progress in global economic rankings.
Macroeconomic conditions have also stabilised over time. Inflation, measured by the Consumer Price Index for Industrial Workers, fell from double-digit levels in 2012–13 to below 3% by 2025. Earlier pressures from high commodity and crude oil prices, along with fiscal slippages, gradually eased as the Reserve Bank of India adopted a firm monetary stance during the post-pandemic recovery, supported by strong foreign exchange reserves.
Lower inflation led to a sustained decline in deposit and lending rates, except for temporary disruptions during the COVID-19 pandemic. While monetary tightening after 2022 pushed interest rates higher for a time, renewed inflation moderation in 2024–25 restored stability and led to a mild softening in rates.
In contrast, the rupee weakened steadily over the period, depreciating from around Rs 45 per US dollar to nearly Rs 90. Elevated inflation in the early 2010s, persistent trade deficits and heavy dependence on oil imports exerted long-term pressure on the currency. Although RBI interventions and ample reserves provided intermittent support, the rupee lost considerable value over time.
India’s equity markets have shown notable resilience. The Nifty 50 index delivered a compound annual growth rate of 10.4% over 15 years, navigating challenges ranging from the US Federal Reserve’s taper tantrum and crude price swings to the NBFC crisis, the pandemic and the Russia-Ukraine conflict. Strong domestic fundamentals, healthier bank balance sheets, gains in manufacturing, and rising domestic investor participation have supported this performance.
Financial services have remained the dominant sector within the Nifty 50, ranking among the top contributors alongside energy, information technology and automobiles in both 2010 and 2025. Over time, the weight of financial services increased, while the relative share of other major sectors declined. Pharmaceuticals improved modestly in representation, and chemicals and consumer discretionary sectors gradually entered the index, reflecting shifts in India’s corporate landscape.
Precious metals also delivered strong returns. Gold prices in India rose more than sixfold over the 15-year period, translating into a CAGR of 12.9%. After a correction between 2012 and 2015, gold regained momentum post-2020 amid global stimulus, central bank buying, currency weakness and heightened uncertainty, reinforcing its role as a hedge.
Silver prices increased nearly fourfold, generating a CAGR of 9.7%. More volatile than gold, silver closely tracked industrial demand and rebounded strongly after the pandemic, driven by supply constraints and rising use in green energy, electronics, and other industrial applications.
Source: Economic Times