India's Economic Survey 2025-26: Strategies for Growth

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Dated: 30.01.2026

“From Stability to Strategic Power: Decoding India’s Economic Survey 2025-26”

Summary

The Economic Survey 2025-26 presents India as a fast-growing economy navigating an increasingly fragmented global order marked by geopolitical tensions, trade disruptions, and financial volatility.

Despite external shocks—including higher tariffs and capital flow risks—the economy demonstrates strong macroeconomic fundamentals such as contained inflation, healthy banks, robust corporate balance sheets, and sustained growth projected at over 7%. The Survey emphasizes the need for strategic resilience through domestic reforms, manufacturing competitiveness, institutional capacity, and deeper global integration.

It frames India’s policy challenge as simultaneously maximising growth while building buffers against external shocks, urging the state, private sector, and citizens to align toward long-term economic strength rather than short-term comfort.

🎯 Key Focus Areas of the Government

1. Fiscal Credibility and Capital Formation

India’s fiscal strategy prioritizes capital investment and human capital while warning that rising state-level revenue deficits could crowd out growth-enhancing spending.

2. Strategic Resilience and Global Value Chains

The Survey stresses embedding India in global value chains to become “strategically indispensable,” reducing vulnerability to coercive trade measures.

3. Manufacturing-Led Competitiveness

Long-term currency stability and economic strength depend on expanding manufacturing exports rather than relying primarily on services.

4. Entrepreneurial State & Institutional Capacity

Policy direction calls for an “entrepreneurial state” capable of acting under uncertainty, learning from experimentation, and enabling innovation.

5. Infrastructure, Logistics, and MSME Scaling

Competitiveness is linked to innovation, skilling, infrastructure development, and MSME expansion to position India as a high-productivity manufacturing hub.

⚠️ Areas of Concern / Limited Focus

1. External Vulnerability

India remains dependent on foreign capital to sustain the balance of payments, making the rupee sensitive to global financial conditions.

2. Persistent Current Account Deficit

High cost of capital is identified as a structural outcome of reliance on foreign savings rather than surplus generation.

3. Overreliance on Services Exports

While services stabilise the economy, they do not impose institutional discipline the way manufacturing exports do, allowing structural weaknesses to persist.

4. Protectionist Risks in Industrial Policy

Excessive protection for upstream industries may raise costs for downstream exporters and weaken global competitiveness.

5. Fiscal Populism at State Level

Unconditional transfers and revenue deficits risk undermining sovereign borrowing costs and long-term incentives for productivity.

📦 Focus on Customs, Indirect Tax & Foreign Trade Policy

Customs Duties

Moderate customs buoyancy reflects calibrated reductions in basic customs duties on raw materials and essential goods to support domestic manufacturing and reduce input costs.

GST Reform Momentum

GST has stabilised revenues, expanded the tax base to over 1.5 crore taxpayers, and deepened formalisation of the economy.

Recent rationalisation introduced a two-rate structure (18% standard, 5% merit) with expectations that lower tax incidence will boost demand and compliance.

Indirect Tax Administration

Technology-driven compliance initiatives have reduced friction, litigation, and compliance costs while improving voluntary revenue mobilisation.

Trade Policy & FTAs

The recently concluded FTA with the European Union is expected to expand market access for labour-intensive exports and strengthen manufacturing competitiveness.

Strategic Trade Context

Global trade is increasingly shaped by security considerations, sanctions, and export controls, reinforcing the need for India to build strategic indispensability.

⭐Expert Insight/Conclusion

The Survey signals a decisive policy shift — from macro stability to strategic economic power. India’s next growth phase will hinge less on cyclical expansion and more on manufacturing depth, institutional capability, and trade positioning in a geopolitically fractured world.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: Economic Survey 2025-2026, Dept. of Finance

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