Why in news?

U.S. President Donald Trump's remarks calling India a “dead economy” and announcing a 25% tariff, along with penalties for India’s military and energy purchases from Russia, have ignited a political exchange in India.

Opposition leaders agreed with Trump’s criticism, blaming the government for “killing” India’s economy. On the other hand, the govt defended India’s economic performance, highlighting its rise from the “fragile five” to one of the world’s top five economies.

What’s in Today’s Article?

• Data Contradicts Trump’s Dead Economy Remark on India
• India Among Few Economies Growing Faster Than the U.S.
• India’s Economic Growth Masks Deep-Rooted Structural Challenges

Data Contradicts Trump’s Dead Economy Remark on India

• Contrary to U.S. President Donald Trump’s claim of India being a “dead economy,” data from the International Monetary Fund (IMF) over the past 30 years presents a starkly different picture.
• From 1995 to 2025, India’s GDP has grown nearly 12 times, ranking it among the fastest-growing major economies, second only to China.
• In comparison, the U.S. economy has grown fourfold, while key allies like the United Kingdom and Germany have expanded by less than three times and less than two times, respectively.
• Notably, Japan’s GDP in 2025 is lower than its 1995 level, reflecting economic stagnation.
• The data underscores that India and even Russia, despite facing challenges, have exhibited robust economic growth, debunking the narrative of them being “dead” economies.

India Among Few Economies Growing Faster Than the U.S.

• When comparing economic growth relative to the U.S., only three countries—China, India, and Russia—have expanded their share of the global economy over the past 30 years.
• India, which was less than 5% the size of the U.S. economy in 1995, has grown to nearly 14% by 2025.
• In contrast, America's traditional allies and trade partners, including the United Kingdom, Germany, and Japan, have all seen their economies shrink in size relative to the U.S.
• This highlights India’s impressive economic ascent, defying claims of being a “dead” economy.

India’s Economic Growth Masks Deep-Rooted Structural Challenges

• While India is far from being a “dead” economy, its robust GDP growth conceals several persistent structural issues.
• Since 2011-12, India’s growth rate has slowed, failing to replicate the 8-9% surge seen before the 2008 global financial crisis, with recent years hovering around 6%.
• Unlike China’s rapid expansion, India’s GDP has grown at a much slower pace.
• In global trade, India holds a modest 1.8% share in goods exports and 4.5% in services.
• The economy remains protectionist in sectors like agriculture, which is plagued by distress and subsistence-level farming due to the failure of manufacturing to absorb surplus rural labour.
• Manufacturing growth has lagged behind agriculture since 2019-20.
• Additionally, economic growth has been highly unequal, with 24% of the population still below the poverty line and alarming rises in income inequality.
• Human development indicators, particularly in health, education, and employment quality, remain poor.
• High-skilled unemployment and low female workforce participation further highlight deep-rooted socio-economic challenges that need urgent attention.