India stands at a defining moment in its modern economic and geopolitical journey as the world’s most populous nation marks its 77th Republic Day. From a newly independent democracy in 1950 to a rising global powerhouse in 2026, India’s transformation has become one of the most compelling development stories of the 21st century.
At a time when the world economy is grappling with slowing growth, geopolitical fragmentation and shifting trade alliances, India is emerging not only as a rare engine of economic momentum but also as an increasingly influential diplomatic, cultural and strategic force.
A republic in motion
The world’s most populous nation has overtaken Japan to become the fourth-largest economy and is on course to surpass Germany in the coming years to claim third place globally. Prime Minister Narendra Modi has described this phase as one of “unprecedented certainty”, underlining the role of policy stability and long-term vision in strengthening investor confidence amid global uncertainty.
What distinguishes India’s current ascent is its breadth. Economic expansion is being matched by progress in digital infrastructure, clean energy, advanced manufacturing, space technology and innovation. At the same time, India’s soft power — powered by culture, education, diaspora networks, yoga diplomacy and humanitarian outreach — is expanding the country’s global footprint.
World’s fastest large economy
India enters 2026 firmly positioned as the world’s fastest-growing major economy. Multilateral institutions continue to project strong expansion driven by domestic demand, infrastructure spending and services-led productivity gains. The International Monetary Fund has repeatedly identified India as a key driver of global growth, citing resilient consumption and sustained investment momentum even as many advanced economies slow.
The United Nations projects India’s economy to grow about 6.6 per cent in 2026, while the OECD expects growth to remain above 6 per cent over the medium term. These projections place India well ahead of global averages and reflect the structural strength of its vast domestic market, favourable demographics, rising urbanisation and expanding middle class. Economists note that India’s growth model has become more balanced, supported by capital formation, manufacturing expansion and digitally enabled productivity improvements.
Consumption and infrastructure engines
A central pillar of India’s momentum is the resilience of domestic consumption. Rising incomes, digital financial inclusion and improved access to credit have strengthened household spending even amid global inflation pressures. This large consumer base provides a natural buffer against external shocks.
Simultaneously, the government’s infrastructure push — covering highways, ports, logistics corridors, railways and urban transit systems — is reshaping connectivity and lowering business costs. Elevated public capital expenditure has helped crowd in private investment, strengthening long-term productive capacity. Economists increasingly describe this twin-engine model of consumption and infrastructure investment as the backbone of India’s growth strategy.
Digital public infrastructure advantage
India’s digital public infrastructure has emerged as a global benchmark. The Unified Payments Interface now processes more than 21 billion transactions each month, transforming everyday commerce and accelerating financial inclusion. Millions of small merchants, informal workers and rural households have been integrated into the formal economy.
Beyond payments, platforms such as Aadhaar digital identity, direct benefit transfers and e-governance portals have improved service delivery and transparency. International institutions increasingly view India’s digital stack as a scalable and low-cost development model. This backbone is also powering rapid growth across fintech, health technology, education platforms and e-commerce.
Industrial scale-up and innovation
India’s manufacturing strategy is moving beyond assembly toward deeper value-chain participation. Production-linked incentive programmes covering electronics, semiconductors, renewable energy components, pharmaceuticals and electric vehicles are attracting both domestic and foreign investment. As global companies diversify supply chains, India is emerging as a preferred alternative manufacturing hub.
The country’s startup ecosystem continues to expand, placing India among the world’s leading innovation hubs. Nomura’s Sonal Varma recently described India’s “goldilocks situation” — strong growth alongside moderating inflation — projecting GDP expansion of around seven per cent in the next fiscal year, reinforcing confidence in medium-term momentum.
Clean energy and strategic technology
India’s renewable energy expansion is reshaping its long-term development path. Solar capacity has crossed 135 gigawatts, while total renewable installations are approaching 254 gigawatts. Investments in green hydrogen, battery storage, electric mobility and grid modernisation are creating new industrial ecosystems. Global climate institutions increasingly cite India’s renewable build-out as one of the most significant energy transition stories worldwide.
India’s space programme continues to symbolise scientific ambition and strategic capability. The opening of the sector to private companies is accelerating innovation in satellite manufacturing, space applications and commercial launch services, strengthening India’s long-term technological edge.
Soft power and global influence
Alongside economic strength, India’s soft power is expanding rapidly. Culture, cinema, cuisine, education, yoga diplomacy and digital public goods are strengthening the country’s global presence. The Indian diaspora — particularly across the Gulf, North America and Europe — plays a vital role in entrepreneurship, trade facilitation and cultural exchange.
Diplomatically, India has positioned itself as a leading voice of the Global South while maintaining strategic partnerships across power blocs. Former RBI Governor Raghuram Rajan has, however, urged caution, stressing that sustaining momentum will require deeper reforms, job creation and sustained investment in human capital — a reminder that ambition must be matched by execution.
India–UAE strategic corridor
India’s partnership with the UAE has emerged as one of its most dynamic global relationships. The UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan’s recent visit to India elevated the partnership further, with both sides committing to double bilateral trade to $200 billion by 2032. This builds on the momentum created by the Comprehensive Economic Partnership Agreement, which has already pushed bilateral trade close to $100 billion in the 2024–25 financial year — nearly doubling in less than three years.
The UAE has become a major investor in Indian infrastructure, energy, logistics and technology, while Indian businesses continue to expand across the Emirates in real estate, healthcare, education and professional services. People-to-people ties remain the backbone of this partnership, anchored by a vibrant Indian diaspora.
Wider GCC engagement and Republic Day outlook
India’s engagement with the wider GCC now exceeds $175 billion in annual trade, supported by energy cooperation, food security partnerships and expanding investment flows. Gulf sovereign wealth funds are playing a growing role in India’s renewable energy, ports and digital infrastructure, while Indian firms are increasingly embedded in Gulf diversification strategies.
As India celebrates its 77th Republic Day, it stands stronger, more influential and more globally integrated than ever before. From becoming the world’s fourth-largest economy to building world-class digital platforms, accelerating renewable energy leadership and expanding soft power reach, India’s rise reflects both scale and strategic clarity — a confident republic shaping global growth in an uncertain world.
issacjohn@khaleejtimes.com