India’s position: growth with heavy dollar needs

India is projected to grow between 6.4% and 7% annually through 2027, keeping it the fastest-growing major economy, with domestic demand doing most of the heavy lifting. Manufacturing and construction have rebounded, and a manufacturing PMI above 56 in late 2025 signals robust expansion aligned with the “China-plus-one” realignment in global supply chains. On the capital side, India has secured record FDI commitments of around $135 billion (₹12.15 lakh crore) in 2025, driven by multi-year AI, cloud, and data-center investments from Big Tech. These are long-horizon deployments into capacity creation - structurally different from the interest-sensitive, often volatile flows of FPI.

Together, they indicate that India’s growth momentum is bein

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