India remains the world's fastest-growing major economy but requires substantial structural reforms to realise its ambition of becoming a $10 trillion economy by 2047, said Gita Gopinath, Deputy Managing Director of the International Monetary Fund (IMF), during the World Economic Forum in Davos.

She highlighted that the recent slowdown in India's growth trajectory was partly due to reduced public investments during the election period. "We expect public investments to bounce back and rural consumption to strengthen. However, to achieve higher, durable growth, India needs to maintain its focus on public infrastructure investments, ensure timelines are met, improve ease of doing business, and integrate more strongly into global supply chains by cutting some taxes," Gopinath said in an interview with NDTV.

Higher growth demands bigger reforms
India's ambitious target of achieving a $10 trillion economy by 2047 demands deeper reforms than those implemented in the past decade, Gopinath emphasised. "The world isn’t stationary. Achieving this goal will require much bigger structural reforms," she said.

Global economic outlook
The global economy is growing at a steady rate of 3.3 per cent, though disparities exist across major economies, Gopinath observed. "The US economy is strong, while Europe faces challenges. China, too, has issues, particularly in its property sector and domestic demand," she noted, attributing the sustained growth in the US to public spending and productivity gains.

However, Gopinath cautioned about rising geopolitical tensions and trade policy concerns, which pose significant risks to balanced global growth.

India’s growth prospects
India's economic growth is projected to slow to 6.4 per cent this fiscal year, marking the slowest pace in four years. The second quarter GDP growth of 5.4 per cent—its slowest in seven quarters—was attributed to slower growth in the industrial sector.

Despite the dip, resilience in domestic consumption and improved agricultural prospects are expected to drive a rebound, according to economists at the Reserve Bank of India.

Global trade forecast
Global trade volume is expected to grow modestly in 2025 compared to the previous year, though uncertainties persist due to geopolitical risks and rising protectionism.