Economic Survey 2025: The Story India Must Read Beyond the Headlines

New Delhi: The Government of India has released the Economic Survey, and beneath the headline numbers lies a far more complex and uncomfortable story about India’s growth model. This story has been sharply decoded by Vijay Sardana, a veteran corporate leader, agribusiness policy specialist, former advisor to regulatory and government bodies, and a long-time analyst of India’s trade, commodity, and industrial ecosystem.

Drawing from his latest vlog on his YouTube channel Vijay Sardana INSIGHTS, Sardana breaks down the Economic Survey 2026-27 using official government data, connecting macroeconomic trends with ground realities that impact exports, currency stability, jobs, and long-term competitiveness.

While official narratives highlight strong GDP growth and India’s ambition to become the world’s third-largest economy, the Economic Survey data—when read closely—reveals structural weaknesses in exports, rising import dependence, and a growing reliance on services and remittances to maintain macroeconomic balance.

The implications go far beyond policy debate. They directly affect careers, investments, currency direction, and India’s position in global supply chains.

Growth Claims vs Economic Reality

India today presents three parallel realities. On one side, the country is signing Free Trade Agreements and projecting confidence on the global stage. On the other, the rupee continues to weaken, even as policymakers claim India is on track to become the world’s third-largest economy.

The Economic Survey exposes the contradiction. Despite the launch of Make in India in 2014, India’s merchandise trade deficit remains stubbornly high—around $280 billion. This is not a one-year aberration. The deficit has hovered between $250–280 billion for several years, indicating a structural issue rather than a cyclical one.

Globally, total trade has expanded sharply—from $19 trillion in 2019 to nearly $24–25 trillion today, an increase of almost $4 trillion in five years. India’s exports, however, have failed to mirror this expansion. India’s share in global trade remains below 2%.

Why Exports Are Not Delivering

According to the Economic Survey, India’s exports are stagnant in dollar terms. Whatever growth exists is volume-led, not price-led—meaning India is exporting more units but earning less per unit.

As highlighted by Vijay Sardana in his vlog, this directly erodes profitability across the export ecosystem. When exporters earn less, MSMEs, farmers, workers, and logistics partners also suffer.

The core issue is weak pricing power. India largely exports commodities and low-value manufactured goods—rice, textiles, seafood, spices, gems and jewellery. These products lack strong branding, intellectual property, or technological differentiation. International buyers routinely compare Indian suppliers with competitors from Pakistan, Bangladesh, Vietnam, or even other Indian exporters, forcing prices down.

Economic Survey indicators reinforce this:

• Export volume index significantly outpaces export unit value index
• Net terms of trade have deteriorated compared to pre-COVID levels

Trade rewards bargaining power. India currently lacks it.

Structural Weakness: Make in India’s Missing Depth

India’s export basket includes engineering goods, electronics, automobiles, apparel, and gems and jewellery. But the depth is missing. 

Nearly 90% of raw material in gems and jewellery is imported, with India adding mostly labour value. In electronics, pharmaceuticals, green technology, and capital goods, India remains dependent on imported components—primarily from China.

PLI schemes have boosted assembly, but as Sardana points out, they have not created a component-level manufacturing ecosystem. Phones are assembled in India, but chips, camera modules, circuit boards, glass, and frames are imported. Without backward integration, real value addition remains limited.

The result is an export basket that is broad but shallow—many products, small volumes, and no global leadership in pricing or scale.

The Invisible Cushion: Services and Remittances

India has avoided a balance-of-payments crisis largely because of services exports and remittances, not merchandise trade.

India earns roughly $260 billion annually from IT services, business services, and remittances—offsetting 70–80% of the merchandise trade deficit. Indian diaspora remittances alone stand at around $125 billion per year, the highest globally.

However, as Sardana notes, this foreign exchange largely flows back out through imports—especially from China—rather than building domestic industrial capacity.

The risk ahead is significant. As Artificial Intelligence advances, lower-end IT and services jobs face disruption. If services exports weaken, the current account deficit could quickly become unsustainable.

Why the Rupee Keeps Weakening

The rupee’s decline reflects India’s import-intensive growth model. Rising domestic demand and infrastructure investment increase imports of crude oil, electronics, capital goods, fertilizers, chemicals, and gold.

Oil dependency alone remains at 85%. Even with stable volumes, price volatility keeps the import bill elevated. Every ₹1 depreciation in the rupee adds an estimated ₹72,000 crore burden to the economy.

Growth without manufacturing depth simply translates into higher imports—and currency pressure.

Vijay Sardana INSIGHTS: Despite 'Make in India'+PLI, Why there is a $280 billion deficit? 

What Must Change

The Economic Survey’s conclusion is unambiguous: India is not yet an export-led economy. Growth is driven by domestic consumption, services exports, and capital inflows—not global manufacturing competitiveness.

Tariffs and FTAs are not the core problem. As emphasized in Vijay Sardana’s analysis, the real challenge lies in industrial capability, quality, productivity, and innovation.

Equally critical is governance. Export rejections due to quality failures damage India’s global credibility. Fake quality certifications, weak audits, and lack of accountability erode trust in Indian products. Without strict enforcement and penalties, these failures will continue.

The Choice Before India’s Economy

The Economic Survey sends a clear message. India is financing its growth through services exports and diaspora remittances while its merchandise trade remains structurally weak.

Unless India upgrades export sophistication, reduces energy and electronics dependence, strengthens component manufacturing, and integrates into high-value global supply chains, the trade deficit will remain a permanent feature—not a temporary imbalance.

As Vijay Sardana warns in his latest vlog on Vijay Sardana INSIGHTS, the uncomfortable question India must now confront is this:

Is Make in India truly strengthening India—or quietly financing growth for other economies?

That answer will define India’s economic trajectory for the next decade.