The International Monetary Fund (IMF) has raised its growth forecast for India to 7 per cent for 2026-27, underlining the relative stability and resilience of the country’s macroeconomic fundamentals. The revised projection is higher than the 6.7 per cent estimated in July. At a time when global economic growth is expected to average only 3.2 per cent during 2028-31, India’s projected expansion offers grounds for optimism. Strong domestic demand, the robust performance of the services sector, favourable demographic conditions and an expanding domestic market are among the principal drivers of this growth.

Yet, amid these encouraging figures, the central question remains whether economic expansion will translate into tangible improvements in the living standards of ordinary citizens.

In this context, President Droupadi Murmu’s observation that “economic resilience is an integral part of national security” assumes considerable significance. National security cannot be ensured by military strength and missiles alone. Economic self-reliance, technological innovation and the capacity to withstand external shocks are equally essential. The President’s emphasis on innovation, technology and preparedness is particularly relevant in the prevailing geopolitical environment. The wars in Gaza and Ukraine have disrupted supply chains and contributed to volatility in global energy markets, exposing economies to considerable uncertainty. For India, preserving its growth momentum under these circumstances is not merely an economic achievement; it is also a strategic imperative.

However, beneath the positive growth outlook lie several concerns that cannot be ignored. Union Finance Minister Nirmala Sitharaman has expressed concern over the depreciation of the rupee, attributing the pressure on the currency to global uncertainties. The Reserve Bank of India (RBI) has been attempting to manage these pressures. While a weaker rupee can make Indian exports more competitive in international markets, it also raises the cost of imports and can intensify inflationary pressures. India’s dependence on imported crude oil, fertilisers and electronic goods makes the economy particularly vulnerable to currency depreciation. Higher import bills can eventually affect production costs, transport expenses and household budgets. The burden is likely to be felt most acutely by ordinary consumers, who have limited capacity to absorb rising prices.

The government’s thinking on a possible review of capital gains taxation and the Securities Transaction Tax (STT) has also attracted attention. Changes in taxation may be justified when they improve the efficiency and fairness of the financial system. However, uncertainty over the tax regime can influence investment decisions and unsettle financial markets. Investors need a predictable policy environment in which tax changes are communicated transparently and introduced after adequate consultation. The government must strike a careful balance between mobilising revenue, maintaining market confidence and ensuring that taxation does not discourage productive investment. Policy stability is particularly important when the economy is navigating external shocks and currency volatility.

Another important issue concerns investment in Artificial Intelligence (AI). Kumar Mangalam Birla, chairman of the Aditya Birla Group, has cautioned that investments in AI should be guided by actual returns rather than the fear of missing out (FOMO). His observation highlights a significant challenge facing India’s information technology industry. As competition in AI intensifies across the world, companies may feel compelled to invest heavily simply to keep pace with global trends. But technological spending without a clear business strategy, demonstrable productivity gains or sustainable returns can expose firms to financial risks.

India must therefore move beyond enthusiasm for AI and develop a more durable technological foundation. Greater investment in domestic research, innovation, skills development and advanced computing capabilities is essential. Indian companies should focus not merely on adopting technologies developed elsewhere but also on developing indigenous solutions that address domestic and global needs. Universities, research institutions, industry and government must work together to create an environment in which innovation can flourish. Without sustained investment in research and development, India risks falling behind in a field that could reshape productivity, employment and international competitiveness. At the same time, AI adoption must be assessed in terms of its impact on workers, job creation and the distribution of economic benefits.

India’s economic trajectory thus presents a mixed picture. The IMF’s revised forecast, robust domestic demand and the strength of the services sector offer encouraging signs. Yet, rupee depreciation, uncertainty over tax policy and the risks associated with indiscriminate AI investment call for vigilance. Initiatives such as Atmanirbhar Bharat, the promotion of domestic defence manufacturing and the expansion of the digital economy can strengthen long-term economic resilience. Their success, however, will depend on effective implementation, technological capability, institutional coordination and the creation of productive employment.

The government, the RBI and industry must work in coordination to address these challenges. Monetary and fiscal policies should complement one another, while businesses must invest in innovation with a clear understanding of costs, risks and returns. Equally important is the need to strengthen domestic manufacturing, reduce excessive dependence on critical imports and improve the skills of India’s workforce. Economic resilience cannot be built on headline growth figures alone; it requires the capacity to withstand shocks without placing an undue burden on vulnerable sections of society.

Ultimately, a high growth rate is only one measure of economic success. The more important test is whether that growth generates adequate employment, especially for young people, keeps the cost of living within manageable limits and improves access to essential services. Growth that fails to create opportunities or reduce economic insecurity risks widening the gap between national prosperity and individual well-being. India’s challenge is not simply to grow faster than other major economies, but to ensure that the benefits of growth reach every section of society. Only then can the country claim to have achieved genuine economic resilience.