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Indian Economic Growth in FY2023: A Year-End Review

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What Worked for Indian Economic Growth?

What Did Not Work for Indian Economic Growth?

India’s Economy in FY2023: Key Takeaways


The Indian economy witnessed a mix of triumphs and challenges in FY2023. As we approach the end of 2023, it is important to review the key developments that have shaped India’s economy throughout the year. Despite facing challenges, India has made significant progress in various sectors, positioning itself for rapid growth in the coming years. Read on and know what has worked and what has not for the India economy in FY2023, and what lies ahead in the path to Indian economic growth.

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What Worked for Indian Economic Growth?

These are a few things that contributed to the Indian economic growth and ensure positive outcomes in the economic landscape of the nation.

Industrial Manufacturing Sector

The industrial manufacturing sector in India experienced a significant boost in FY2023. Global technology giants like Apple have shown interest in expanding their supplier networks within India, leading to increased investments in the sector. This momentum is further supported by Indian economic growth as well as the implementation of state industrial policies and sector-specific incentive schemes.

Read on: Mobile Manufacturing Boom and Indian Economy: Outlook for 2024 and Beyond.

Investments in Logistics and Infrastructure Development

India has made major logistics and infrastructure development investments, including building of highways, new roads, and rail tracks. These investments highlight the government’s commitment to bolstering the logistics sector and reducing logistics costs. This is crucial for India’s ambition to emerge as a major player in global supply chains and achieve its goal of becoming a US$5-trillion economy by the end of 2025.

Greenfield Investments

India has attracted significant Greenfield investments in FY2023. The attractiveness of India as an investment destination remains quite strong, thanks to its size and scale of operations prowess in technology and innovation, and abundant talent pool with skills. These investments contribute to job creation and Indian economic growth.

Trade Facilitation

India has made significant progress in trade facilitation, simplifying trade procedures, and enhancing transparency. Initiatives like the Single Window Interface for Facilitation of Trade (SWIFT), Turant Customs, and coordinated border management have contributed to India’s commitment to simplifying trade procedures. As a result, India has been recognized as a leader in global trade facilitation efforts.

Exports of Merchandise and Services

India’s exports of services and merchandise have shown positive growth in various sectors. Major sectors showing growth include iron ore, oil meals, electronic goods, oil seeds, ceramic products & glassware, tobacco, fruits & vegetables, drugs & pharmaceuticals, and more. Electronic goods exports, in particular, have experienced significant growth, reaching US$15.48 billion between April and October 2023, a 27.70 percent increase compared to the same duration in 2022.

GDP Growth

India’s real gross domestic product (GDP) registered a 7.6% growth rate in the July to September quarter of 2023, faster than anticipated. The International Monetary Fund (IMF) had forecasted that India’s real GDP would rise more than 6 percent in 2023 and 2024, putting its compound annual growth above China’s. This growth is a testament to India’s resilience and potential for sustained Indian economic growth.

Stock Market

India’s stock market has performed well in FY2023. The Nifty 50 index reached a new high, up 16 percent this year. India’s stock market is now the seventh largest in the world, with a market capitalization of US$3.989 trillion. High-performing sectors predicted for 2024 include healthcare, banking, and energy, while utilities, consumer goods, and chemicals may lag.

Indian EMS Sector

The Indian Electronics Manufacturing Services (EMS) sector has witnessed remarkable growth in FY2023. Apple achieved an annual 177% growth, exporting over-US$5 billion worth of iPhones from India from January to August period of FY2023-24. The sector is being anticipated to grow at a compound annual growth rate (CAGR) of 32 percent by 2026. The government’s production-linked incentive (PLI) schemes have played a significant role in boosting EMS output.


The India economic growth was marked by positive trends in employment in FY2023. The manufacturing sector, in particular, has witnessed an increase in employment for eight consecutive months. This is accompanied by a rise in Indian economic growth, buying activity and robust demand conditions, driving the growth of key infrastructure sectors. The government aims to increase the contribution of the manufacturing sector to the Indian GDP from 17 percent to 21 percent by 2029-30.

What Did Not Work for Indian Economic Growth?

Indian economic growth in 2023 was a little short in these aspects:

Merger and Acquisition (M&A) Activity

India-focused merger and acquisition (M&A) activity experienced a significant decline in FY2023, reaching a three-year low. The total value of M&A deals in the first nine months of 2023 amounted to US$65.6 billion, marking a major decline of 56.6 percent from 2022. This decline can be attributed to an uncertain global macroeconomic environment and rising finance costs.

Non-petroleum and Non-gems & Jewelry Exports

Non-gems & jewelry and Non-petroleum exports in India showed a marginal decline in FY2023. From April to October 2023, these exports reached US$178.42 billion, slightly lower than the US$182.24 billion figure during the same duration in 2022. This decline can be attributed to various factors, including global economy conditions and trade dynamics.

Foreign Direct Investment (FDI) Inflows

India experienced a significant decline in foreign direct investment (FDI) inflows in FY2023. The country dropped to the fifth position on the list of highest-funded geographies. However, certain states like Maharashtra, Karnataka, Delhi, Telangana, and Gujarat continued to attract FDI inflows. The decline in FDI inflows can be attributed to the uncertain global macroeconomic environment and rising finance costs.

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India’s Economy in FY2023: Key Takeaways

Despite the challenges faced, India’s economy in FY2023 has shown resilience and progress in various sectors. The industrial manufacturing sector, investments in logistics and infrastructure development, trade facilitation, exports of merchandise and services, India’s GDP growth, the stock market, the Indian EMS sector, Indian economic growth and employment have been key areas of success.

However, M&A activity, non-petroleum and non-gems & jewelry exports, and FDI inflows have faced challenges. As we approach 2024, India remains poised for rapid growth, with a focus on becoming a US$5-trillion economy and achieving developed economy status by 2047.

Read on: India’s Economy Witnessing “Acche Din”: 10 Reasons Why Indians Can Truly Smile in 2024.


Having accomplished a triumphant Moon Mission and organized the G20 Summit effectively, India is positioned for starting 2024 with increased stability and an optimistic perspective on its growth and future possibilities. The country maintains its prominence as an attractive investment hub, bolstered by robust operations, a diverse pool of skilled professionals, and a robust presence in the realms of technology and innovation. These factors are anticipated to sustain, if not accelerate, Indian economic growth in the upcoming year.

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