India: OG News Analysis | 1 August 2025
In a fiery statement that shocked Indian diplomatic circles and spurred political upheaval at home, former U.S. President Donald Trump labeled India’s economy as “dead” — clubbing it with Russia and warning of punitive tariffs. This explosive remark sparked an immediate political brawl within India and reignited the debate on the true state of India’s economic health.
But is India really a “dead economy”? Or is this just political rhetoric wrapped in trade war tactics?
Let’s unpack the facts, analyze global comparisons, and examine what’s truly happening inside the Indian economy.
💥 What Did Trump Say?
During a campaign rally, Trump declared:
“India can do what it wants with Russia. They can take their dead economies down together. I’m imposing 25% tariffs on all Indian products. Their economy’s done.”
This wasn’t just an economic statement — it was a geopolitical move meant to criticize India’s continued energy and defense trade ties with Russia, despite global sanctions.
Political Firestorm in India
🔹 Rahul Gandhi Endorses Trump
Congress leader Rahul Gandhi created a political stir by agreeing with Trump:
“Yes, Trump is right. The Indian economy is dead. Modi has destroyed it for Adani.”
He listed five key reasons:
- Demonetization and flawed GST
- Failing MSMEs
- Crony capitalism benefiting Adani
- Agricultural distress
- Collapsed “Assemble in India” promise
🔹 BJP Ministers Hit Back
The BJP swiftly condemned Gandhi’s endorsement:
- Piyush Goyal (Commerce Minister): “India is not dead. We are the fastest-growing major economy and soon to be the third-largest in the world.”
- Party leaders accused Gandhi of “echoing foreign propaganda” and “insulting India on global platforms.”
Even senior Congress leaders like Shashi Tharoor and Rajeev Shukla disagreed with Gandhi’s framing, saying India’s economy has “many challenges but is far from dead.”
📊 India’s Economy in 2025 – Reality Check
| Indicator | India (2025) | USA (2025) | EU (2025) | China (2025) |
|---|---|---|---|---|
| GDP Growth Rate | 6.4–6.8% | 2.1–2.3% | 1.2–1.6% | 4.8–5.3% |
| Inflation Rate (CPI) | 2.1% | 3.9% | 2.7% | 1.9% |
| Fiscal Deficit (% of GDP) | 5.6% | 5.2% | 3.0% | 4.2% |
| Unemployment Rate | ~7.8% | 3.6% | 6.0% | 5.2% |
| Global Ranking (GDP size) | 5th | 1st | — | 2nd |
| Projected 2030 GDP Ranking | 3rd | 2nd | — | 1st |
Source: OG News Analysis compiled from IMF, RBI, and industry projections
India continues to be the fastest-growing major economy in the world. But it’s also facing critical internal stress points.
🧠 Key Strengths of the Indian Economy
1. Strong Growth Momentum
Despite global slowdown:
- India recorded 7.4% GDP growth in Q4 2024–25
- RBI forecasts 6.5–6.8% for FY 2025–26
2. Controlled Inflation
- Retail inflation dropped to a six-year low (2.1%) in June 2025
- RBI monetary policies are stabilizing prices
3. Robust Forex Reserves & Global Confidence
- India’s foreign exchange reserves stand strong at over $640 billion
- FDI flows continue, with top sectors being digital tech, infrastructure, and green energy
4. Demographic Dividend
India’s median age is just 29 years, ensuring a large, young, and tech-savvy workforce.
🚨 Key Challenges on the Ground
❌ 1. Unemployment & Jobless Growth
- Youth unemployment is near 17%
- Many sectors are growing without creating enough jobs
❌ 2. MSME Distress
- Post-COVID recovery in Micro, Small & Medium Enterprises remains slow
- GST complexities, low credit, and rising costs continue to hit local businesses
❌ 3. Private Investment Lags
- Big corporations are hesitant to invest heavily
- Only government capex is driving demand
❌ 4. Rising Rural Distress
- Agriculture income has not grown with inflation
- Rural consumption has slowed down
❌ 5. Political Uncertainty & Perception Risks
- The “Adani–Modi” narrative and concentration of wealth raise alarms on inequality
- International image is occasionally strained due to diplomatic moves like oil trade with Russia
🌎 Comparison With Other Global Economies
| Category | India | USA | Europe (Avg.) | China |
|---|---|---|---|---|
| Manufacturing Output | Moderate, rising slowly | High, shifting to services | Mature but aging sector | Strong, but slowing |
| Tech Startups | 3rd largest globally | Dominant | Limited | Expanding, state-backed |
| Services Sector | 55% of GDP | 70% of GDP | 68% | 54% |
| Export Share (GDP) | 21% | 10% | 39% | 18% |
| Energy Dependency | High (imports >70%) | Self-reliant in oil/gas | Diverse but reliant | Mostly self-reliant |
| Debt-to-GDP Ratio | 83% | 123% | 89% | 71% |
🌍 Global Economic Crisis: A Common Struggle
Before casting judgment on any single nation, it’s essential to recognize that the entire world is grappling with economic turbulence. The COVID-19 pandemic dealt a historic blow to global growth, disrupting supply chains, collapsing small businesses, and pushing millions into poverty. Just as nations began to recover, multiple geopolitical conflicts — including the Russia–Ukraine war, Middle East tensions, and trade rivalries — reignited inflation, energy shortages, and currency instability. Developed economies like the United States, Germany, France, and even China are all facing rising debt, stagnant job markets, and investor uncertainty. In this global context, India’s continued growth—even with its challenges—stands out as a story of resilience rather than decline.
🎯 Verdict: Is India a “Dead Economy”?
Absolutely not. India is alive, growing, but unevenly.
While the country posts strong macroeconomic numbers, beneath that success lies a complex mix of structural pain, inequality, and sectoral strain. Growth is real—but not always inclusive.
Trump’s statement reflects geopolitical anger, not deep economic analysis.
Rahul Gandhi’s response is more political theatre than policy critique.
The BJP’s optimism is rooted in solid growth metrics, but must acknowledge India’s internal challenges.
🔮 What India Needs Going Forward
- Boost to Manufacturing – India must graduate from assembling to innovating.
- MSME Reforms – Credit access, tax simplification, and digital push are key.
- Jobs, Not Just Growth – Employment generation needs a full government‑private sector strategy.
- Inclusive Rural Growth – Rebalancing urban–rural development.
- Balanced Global Diplomacy – Avoid excessive dependency on any single bloc.
📝 Final Thoughts from OG News
India is not dead. It is awakening to its potential, but carrying old burdens.
It is a work in progress—sometimes noisy, sometimes clumsy, but marching forward with ambition.
As the world watches, it is not Trump, not Rahul Gandhi, and not even government data that will define India’s economic destiny—it is how India reforms, includes, and delivers for its 1.4 billion citizens.
