Context: Trump’s “Dead Economy” Comment
U.S. President Donald Trump labelled India and Russia a “dead economy” on July 31, 2025, alongside announcing new 25% tariffs on Indian imports—citing high tariffs and India’s ties with Russia in energy and defence.
The Indian government—including Commerce Minister Piyush Goyal—and commentators swiftly rejected this, highlighting India’s status as “fastest‑growing” major economy and its expected rise to the world’s third‑largest in coming years.
India’s Economic Reality vs. “Dead”
GDP Growth
- According to the IMF’s July 2025 World Economic Outlook, India is forecast to grow 6.4% in both 2025 and 2026, cementing its position as the fastest-growing major economy in the world.
India is often cited as the fastest-growing major economy globally, with many forecasts projecting around 6–6.5% GDP growth in fiscal year 2025‑26. Meanwhile, Fitch Ratings slightly revised its FY 2025–26 growth estimate to 6.3%, citing ongoing strength in infrastructure-driven investment and domestic demand even amid tariff headwinds, while advanced economies (including the U.S.) around 1.4% and 1.9 % (IMF for U.S.A.).
Public Debt (% of GDP)
- India’s debt-to-GDP ratio is reported around 83%.
- In contrast, the U.S. debt-to-GDP stands at roughly 106–120% of GDP.
Other Indicators
- India ranks among the top 5 economies by nominal GDP in 2025 (USD 4.19 trillion), third in PPP terms (USD 13 trillion).
- Exports in FY 2024‑25 are estimated at USD 820–825 billion, up 5‑6% year‑on‑year.
- Stock market indices and investor returns remain robust, contradicting any notion of stagnation.
India vs. USA: GDP Growth & Debt Comparison
| Indicator | India | United States |
| Real GDP Growth (2025) | 6.4% by IMF & 6.3% forecast by Fitch | 1.9% (IMF projection) |
| Debt-to-GDP | 83% | 106–120% |
| Export Volume Growth | 5–6% increase in 2024‑25 | Larger total volume but slower growth |
| Market Sentiment | Positive with rising investment | Stable, but rate-sensitive |
Interpretation:
India’s high growth and lower debt ratio relative to the U.S. show it is far from “dead.” A debt-to‑GDP around 83% is substantial yet manageable—especially at India’s high growth rate—whereas the U.S. face long‑term fiscal sustainability risks at over 100 %. Moreover, strong domestic demand and infrastructure investment underpin India’s growth potential.
Strong Domestic Demand is the total demand for goods and services within India by its own population, businesses, and government.
- Why it matters:
- India has a population of over 1.4 billion, creating a large consumer market for food, housing, electronics, automobiles, and services.
- As incomes rise and the middle class expands, spending power increases, boosting economic activity even if global trade slows.
- This makes India’s growth less dependent on exports, unlike some other emerging economies.
Example:
The rapid rise in e-commerce, automobile sales, and housing projects in India reflects robust domestic consumption.
Infrastructure Investment spending by the government and private sector on physical infrastructure—such as roads, railways, airports, ports, energy grids, and digital connectivity.
- Why it matters:
- Creates jobs directly (construction) and indirectly (manufacturing, logistics).
- Reduces costs of doing business (better transport → faster deliveries).
- Attracts foreign and domestic investment because of improved facilities.
- Supports long-term productivity growth by modernizing the economy.
Example:
India’s Gati Shakti Plan and record spending on national highways and metro projects have improved logistics efficiency, reducing costs for businesses and boosting growth potential.
India as per estimate by IMF (April/July 2025) for real GDP growth still top the list of growing economy among major countries.
India should focus and work diligently on enhancing the capacity and capability of its human resources. The country’s demographic dividend is robust and supports long-term growth and sustainable development. If the Indian government implements these reforms effectively, India will have no reason to worry or lag behind in its journey to becoming a developed and prosperous nation.
Conclusion
- Trump’s claim of the Indian economy being “dead” is factually contradicted by growth data, external commentary, and economic forecasts.
- India is among the world’s fastest‑growing major economies, with 6%+ growth and sustainable debt levels.
- By contrast, the U.S. maintains slower growth (1.9%) and much higher debt-to-GDP, though at a large absolute level.
- Globally, the fastest growing economies are concentrated in emerging markets, with India securing top positions.
References
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