 "India's top economic moments in 2024: Women welfare to foreign inflows")
From economic growth and technological strides to diplomatic successes and social welfare reforms, India has made significant progress in 2024. As the year draws to a close, here is a look back at the country’s journey this year which has been nothing short of transformative, with achievements that solidify its standing as a global powerhouse.
Remain the fifth-largest economy
India’s economy continued its robust recovery in 2024, with the country recording a 7 per cent gross domestic product (GDP) growth, making it the world’s fastest-growing major economy. The country continues to be the fifth-largest economy in the world, quickly catching up to Germany which enjoys the fourth position on the list.
FDI crosses $1 trillion (2000-2024)
India’s strong performance was driven by a surge in foreign direct investment (FDI), which crossed a record $1 trillion between April 2000- September 2024. This growth was further supported by record exports amounting to $778 billion, reinforcing India’s position in the global market. More than 69 per cent of these inflows were recorded in the last decade (April 2014–September 2024).
Strengthening foreign relations
Amid the Russia-Ukraine war, Prime Minister Narendra Modi became the first Indian PM to visit Ukraine, while President Droupadi Murmu became the first Indian head of state to visit Fiji.
Modi also received the Order of Excellence from Guyana. India hosted the third edition of the Voice of the Global South Summit, attended by representatives from 100 nations, continuing its global influence build up in the G20 Summit in 2023.
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India also forged key partnerships, including a free trade agreement with Iceland under the European Free Trade Association (EFTA), and a bilateral investment treaty with the UAE. India was re-elected to the UN Peacebuilding Commission.
Foreign tensions: Maldives, Canada, and more
India managed to resolve several regional conflicts, notably with the Maldives, where diplomatic efforts have alleviated tensions. However, its relationship with Canada remains strained, largely due to differences over issues related to the Sikh diaspora and broader geopolitical concerns.
India has been in ongoing discussions with Bangladesh over the rise in violence against Hindus, a minority group in the country. The relationship between India and Nepal also faced a setback when Nepal released new currency notes that featured a map including disputed territories claimed by both countries. This move escalated tensions between the two neighbors, who have a longstanding dispute over the regions of Kalapani, Lipulekh, and Limpiyadhura.
Infrastructure and connectivity
India constructed an average of 27 km of new roads every day, drastically improving connectivity within and between regions. Tap water reached 79 per cent of Indian households, the Bharat Progress Report 2024, compiled by NewsX showed. This expansion marks a fivefold increase in access to clean water over the past five years.
In a major boost to regional connectivity, the Udhampur-Srinagar-Baramulla rail link was completed, enhancing transport in the Jammu and Kashmir region.
Defence and security
The Ministry of Defence was allocated Rs 6.22 trillion, its highest budget to date, up by 4.79 per cent from the previous financial year. The aim was to modernise equipment and manufacture locally.
The year 2024 saw the successful test of the first long-range hypersonic ballistic missile significantly bolstered India’s defence readiness. In addition, India secured a $3.5 billion drone deal with the United States, strengthening bilateral defence ties.
India’s security situation also improved, with the disengagement of Indian and Chinese forces in Ladakh after four years of tension, signalling a potential de-escalation.
Welfare schemes for women
2024 was also a year of significant progress in social welfare and women’s empowerment. The Union Budget allocated Rs 3 trillion to women’s schemes. The year also saw Lok Sabha, nine states and 1 Union Territory elections where all parties promised welfare schemes for women.
The number of women tax filers rose by 25 per cent, while over 1.1 million women became ‘Lakhpati Didis’, boosting financial independence and contributing to the broader economy.
Stock market roller coaster
In the first half of 2024, India’s stock market indices, Nifty 50 and Sensex, posted an impressive 10.5 per cent gain, reflecting strong momentum. However, this performance faltered in the second half of the year, particularly during the December quarter, as a combination of both global and domestic factors led to a significant pullback.
The market’s decline in the latter part of the year was driven by heavy selling from foreign portfolio investors (FPIs), concerns over high valuations, a slowing Indian economy, weak urban consumption, geopolitical tensions in West Asia, and the persistent Russia-Ukraine conflict. As a result, the indices have seen a nearly 2 per cent decline in the December quarter.
Despite the recent setbacks, India remains well-positioned for growth stories for the next decade. Ridham Desai, Morgan Stanley’s chief equity strategist for India, highlighted that India could be entering its longest stock market bull run. This optimism is driven by strong macroeconomic stability, aided by the government’s focus on inflation control and fiscal consolidation, as well as India’s decreasing reliance on oil imports.
India is expected to be among the best-performing emerging markets in 2025, with earnings growth projected to rise 18 per cent to 20 per cent annually through 2030.
Economic slowdown amid food inflation
The July-September quarter saw India’s GDP growth rate fall unexpectedly to 5.4 per cent, its slowest pace in seven quarters, while inflation remains well over 4 per cent. While this triggered some tensions, the RBI confirmed that the slowdown and inflation were driven by high food costs and would normalise by the January-March quarter.
Despite the challenges posed by inflation, the RBI decided to keep its key interest rate unchanged in December. However, it also made a significant move by reducing the cash reserve ratio for banks for the first time in over four years, effectively easing monetary conditions in response to the slowing economic growth.