India economy to regain its mojo, return to current account surplus: NITI Aayog's Lahiri

New Delhi: NITI Aayog Vice Chairman Ashok Kumar Lahiri expressed optimism about the Indian economy regaining its strength and returning to a current account surplus, according to a statement released on Wednesday. Speaking at the Global Fintech Fest 2026, Lahiri highlighted that while the Indian economy has been performing reasonably well, the major hurdle the nation faces is the low manufacturing share in its overall GDP.

Despite global uncertainties and geopolitical tensions, India's economy expanded by a faster-than-expected 7.8 percent in the April-June quarter, demonstrating resilience.

Lahiri emphasized that domestic savings, rather than foreign investments, should drive India's economic growth. Drawing parallels with the United States in the early 19th century and East Asia, he pointed out that current account surpluses are typically generated through domestic savings, not foreign capital. He reiterated that the Indian economy will soon generate a current account surplus, dispelling concerns about the 3 percent rule.

For the fiscal year 2025-26, the current account deficit was recorded at USD 25.2 billion, or 0.6 percent of GDP, a slight improvement from the previous year's USD 22.9 billion. Lahiri noted that when GDP increases, the manufacturing sector typically shrinks, but India's recent GDP data shows an upward trend in manufacturing share. However, he stressed that more manufacturing is needed in the country.

Foreign investments in sectors such as renewable energy, data centers, semiconductors, and electronic manufacturing systems are positive developments for India, according to Lahiri. Addressing the banking sector, he pointed out the challenges in credit appraisal and suggested leveraging the vast data generated by UPI for better risk pricing and including the informal sector, particularly MSMEs, in the formal credit system.