Rajit Singh
New Delhi, May 1, 2025 — India has retained its position as the top emerging market (EM) economy for the fourth consecutive year in 2024–25, according to Mint’s Emerging Markets Tracker. This milestone comes despite significant headwinds in the latter half of the fiscal year, including weak exports, falling stock market capitalization, and a depreciating rupee.
While the Indian stock market saw volatility—particularly after U.S. President Donald Trump’s tariff announcements—its swift recovery helped reinforce India’s image as a relatively stable investment destination among emerging markets.
“India would be seen as a safe haven in certain terms among EMs and Asian economies as its economy is domestic demand-driven,” said Gaura Sengupta, Chief Economist at IDFC First Bank. “Our exposure to the tariff tension compared with other Asian countries is lower.”
A Shaky Yet Triumphant Year
Unlike previous years where India maintained a consistent lead, FY25 presented a more turbulent journey. The country slipped to sixth position in August and further down to seventh in February, largely due to a wave of foreign investor outflows triggered by more attractive opportunities in China following its economic stimulus rollout.
Still, India’s robust performance in the initial months of the fiscal year—when it held the top position for four consecutive months—gave it a strong enough cushion to outpace major EM peers like China and the Philippines by the year’s end.
Trade War Turns the Tide
Geopolitical factors also played a role. As the U.S.-China trade war reignited with fresh tariffs, investor sentiment started tilting back toward India, seen as less exposed to the global trade disruptions due to its domestic demand-oriented economy.
Looking Ahead
India’s ability to withstand external shocks and maintain growth momentum has once again highlighted its standing among global emerging markets. With global tensions simmering and investors reassessing risks, India’s long-term economic resilience continues to make it a preferred destination—even when the tides are rough.
Abhishek Kumar
