Sustained high growth, reforms essential to make India 'developed economy' by 2047: International Monetary Fund
A day after the International Monetary Fund’s (IMF) update to the World Economic Outlook saying India was one of the fastest-growing economies in the world and a key engine of growth, the Director of the Communications Department of IMF, Julie Kozack has said that sustained high growth and continuity in reforms will put India on the path to emerge as a developed economy by 2047. She added that the country has made significant progress in structural reforms, such as implementing a new labour code, concluding new trade agreements and advancing deregulation at the state level.
To sustain the growth in coming period, she suggested that India should build on the progress in structural reforms, and take further active efforts to strengthen skills in the economy, increase flexibility in the labour market, to reduce costs for businesses, costs associated with clients and regulation, and to deepen trade integration. On manufacturing front, she noted that India is benefiting from supply chain diversification. However, she pointed that the gains have been concentrated in some areas, most visibly in electronics, so far. She added that India's electronics exports rose by 24% in fiscal year 2026 with Smartphones becoming one of the country's largest export products. Much of this increase in production for exports seems to be happening through domestic contract manufacturers rather than foreign-directed ones.
Recently, the International Monetary Fund (IMF), in its July update to the World Economic Outlook (WEO), has said that the Indian economy is likely to grow at 6.4% in fiscal year 2026-27 (FY27), 10 basis points (bps) lower than its 6.5% growth projection in the April Outlook. It noted that higher energy prices may offset the resilience in the country's economic activity. It further projected India’s economy to grow at 6.7% in FY28, 20 basis points higher than the 6.5% growth projected in the April Outlook.
