PM Modi Celebrates 7.8% GDP Growth Amid Global Turmoil

Prime Minister Narendra Modi on Tuesday celebrated India’s stellar 7.8% GDP growth in the April-June quarter of 2025, calling it a triumph that “outperformed every expectation, estimate, and forecast” despite global economic uncertainties and challenges driven by “economic self-interest.” Speaking at the Semicon India 2025 conference in Delhi, Modi took a veiled swipe at U.S. President Donald Trump’s recent “dead economy” jibe, highlighting India’s resilience in the face of punitive 50% tariffs imposed on Indian goods.

The robust growth, the fastest in five quarters, outpaces China’s 4.6% and the U.S.’s 3.3% for the same period, cementing India’s position as the world’s fastest-growing major economy. Modi emphasized that the expansion spans key sectors—manufacturing, services, agriculture, and construction—infusing “new energy” across industries and among citizens. He attributed this success to a decade of macroeconomic stability, with a fiscal deficit projected at 4.4%, robust foreign exchange reserves, and controlled inflation at 5.2% in December 2024, despite high food inflation at 8.4%.

The Prime Minister’s remarks come amid escalating trade tensions with the U.S., where Trump imposed a 25% reciprocal tariff on India in August, followed by an additional 25% penalty for India’s continued purchase of Russian oil, totaling a 50% tariff—the highest globally, matched only by Brazil. Trump’s policies, aimed at boosting American manufacturing, have sparked global economic chaos, with India labeling the tariffs “unfair, unjustified, and unreasonable.” Modi countered Trump’s narrative, asserting that India’s growth trajectory is propelling it toward becoming the world’s third-largest economy by 2030, with a projected GDP of $7.3 trillion.

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Modi hinted at an upcoming wave of “next-generation reforms,” including a major overhaul of the Goods and Services Tax (GST). The GST Council, meeting in New Delhi on September 3-4, is set to discuss rate reductions on everyday items like shampoos, hybrid cars, and consumer electronics to boost consumption and ease the burden on the middle class, estimated at 570 million people. These reforms aim to address sluggish consumption and high food inflation, which 64.3% of Indians cite as making expenses difficult to manage, according to a recent India Today survey.

Despite the growth, challenges persist, including job creation for India’s 12 million annual workforce entrants and a manufacturing sector stuck at 13% of GDP, down from 17% in 2014, undermining Modi’s “Make in India” goals. The unemployment rate, pegged at 8.05% by private forecasters, remains a concern, with 65% of Indians expecting stagnant or worsening household incomes in the next six months. Modi’s government is banking on increased infrastructure spending, digitalization, and global offshoring to sustain momentum, with initiatives like the PM Gati Shakti Plan and a 100 GW solar PV capacity signaling long-term ambition.

As global trade faces uncertainty from Trump’s tariff regime, Modi’s focus on self-reliance and domestic demand underscores India’s strategy to navigate external pressures. With record foreign exchange reserves and a thriving services sector, India aims to maintain its economic edge, positioning itself as a beacon of growth in a turbulent global landscape.

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