New Delhi: India has the potential to power the next wave of global economic growth, backed by strong macroeconomic foundations, a dynamic private sector, a deep talent pool and rapidly expanding technological and manufacturing capabilities, according to International Monetary Fund (IMF) Deputy Managing Director Nigel Clarke.

Clarke made the assessment at the conclusion of his five-day visit to India from September 7 to 11, during which he held discussions with policymakers, business leaders and other stakeholders in New Delhi, Mumbai and Chennai. He described India as a key driver of global growth and the world’s fastest-growing major economy.

Technology, manufacturing seen as key growth engines

According to the IMF, India’s next phase of expansion could be increasingly driven by innovation, digital transformation, advanced manufacturing and wider adoption of technology. Clarke said these areas could help raise productivity, strengthen India’s competitiveness and enable businesses to move towards higher-value activities.

He also highlighted India’s private-sector dynamism and large pool of skilled talent as important strengths that could support sustained economic expansion.

During his India visit, Clarke met Finance and Corporate Affairs Minister Nirmala Sitharaman, Reserve Bank of India Governor Sanjay Malhotra and NITI Aayog Vice Chairman Ashok Kumar Lahiri. Discussions covered India’s economic outlook, changes in the global environment and policy priorities for achieving sustainable and inclusive growth.

IMF stresses stability and reforms

While highlighting India’s growth potential, Clarke also stressed the importance of maintaining macroeconomic stability amid heightened global uncertainty.

The IMF said India would need to keep inflation under control, maintain economic resilience and continue reforms aimed at lifting productivity and competitiveness. The Fund has also pointed to trade integration, investment, labour-market reforms, human-capital development and a stronger business environment as important elements of India’s medium-term growth strategy.

The IMF’s July 2026 World Economic Outlook update projects India’s real GDP growth at 6.4 per cent in 2026, while its country profile lists the same projection. The Fund’s July assessment also cited stronger-than-expected recent economic activity and resilient high-frequency indicators as factors supporting India’s outlook.

Productivity could determine the next phase

The IMF has separately identified productivity and innovation as critical to India’s long-term economic ambitions. In a January 2026 analysis, IMF economists said strengthening innovation and removing barriers that prevent firms from expanding could increase India’s productivity growth rate significantly.

The Fund noted that India’s services sector has recorded strong productivity gains, helped by digital technology and integration with global value chains, while manufacturing productivity has been more subdued. It also identified greater research and development, stronger business dynamism and wider technology adoption as areas with substantial potential.

Artificial intelligence could add another layer to this transformation. The IMF said nearly 60 per cent of Indian firms already use some form of AI, although adoption remains uneven because of skills shortages, technology constraints and difficulties integrating AI into business operations.

Manufacturing momentum

India’s own Economic Survey 2025-26 also points to strengthening industrial activity. The Survey said industry grew 7 per cent in the first half of FY2025-26, with manufacturing expanding 8.4 per cent. It also highlighted the rapid expansion of electronics exports and domestic manufacturing, particularly in mobile phones.

The developments underline the growing importance of manufacturing alongside India’s established strength in services as the country seeks to deepen its participation in global value chains.

Global economy faces uncertainty

Clarke’s assessment comes against a challenging international backdrop. The IMF’s April 2026 World Economic Outlook projected global growth at 3.1 per cent for 2026 and 3.2 per cent for 2027, while warning that geopolitical tensions, trade fragmentation and elevated uncertainty could weigh on the world economy.

Against this backdrop, the IMF’s latest assessment places India among the major economies capable of making a significant contribution to global expansion.

For India, however, the Fund’s broader analysis indicates that converting its economic scale and technological advantages into sustained high growth will depend on continued productivity improvements, investment in skills, innovation, stronger firm growth and reforms that expand employment opportunities.

Clarke summed up the IMF’s assessment by saying that India has the potential to power the next wave of global growth, with the Fund continuing to work with the country in supporting that trajectory.