India’s Nuclear Energy Expansion: Russia, France, and the US Eye Small Modular Reactors India's growing energy needs have led to increased global interest in its nuclear energy sector. Russian nuclear giant Rosatom has proposed offering India its expertise in developing small modular reactors (SMRs), which could be installed in coastal areas. This potential collaboration aligns with India's goal of achieving 100 gigawatts (GW) of nuclear energy by 2047. Russia's Role in India's Nuclear Ambitions Rosatom, a leading player in the global nuclear industry, has been involved in India's nuclear energy sector for years. It is currently constructing the Kudankulam Nuclear Power Project and has decades of experience in SMR technology. The company has already developed operational SMRs and previously offered India assistance in building small tropical nuclear power stations. These stations could be localized to include Indian-built components. In 2024, Rosatom signed an a...
DeepSink: India's Growth Stalls, AI Could Worsen the Crisis, Warns Economic Survey 2025
Slowing Economy, Global Uncertainty, and AI Disruptions Threaten Modi’s 2047 Vision of a ‘Developed India’
If you think the economy is struggling now, the future may not bring much relief. Artificial intelligence is also emerging as a significant threat to jobs.
That’s the sobering takeaway from the government’s annual economic assessment.
The Economic Survey anticipates sluggish growth in the coming years, with only a marginal improvement expected in the next financial year, which begins in April. The report, traditionally released before the Union Budget, estimates GDP growth at 6.4% for the current year—marking the slowest pace since the pandemic.
For the next year, predictions range between 6.3% and 6.8%, far below the 8% growth required over a sustained period to achieve Prime Minister Narendra Modi’s ambitious goal of turning India into a developed nation by 2047.
What’s Hindering Growth?
Uncertainty remains a key obstacle. The Economic Survey highlights a rapidly shifting global landscape, warning of challenges such as geopolitical tensions, trade disruptions, and potential spikes in commodity prices.
There are some encouraging signs—rural consumption is expected to remain robust, and inflation may cool down. However, climate change poses a significant risk. The report cautions that extreme weather events and rising global agricultural prices could drive food inflation higher.
“The growth forecast aligns with current global uncertainties,” says Aditi Nayar, an economist at ICRA, the India division of Fitch Ratings.
AI: A Growing Threat to India’s Workforce
One of the biggest risks to India's economic future is artificial intelligence. The survey warns that India’s workforce is especially vulnerable due to its heavy dependence on low-skilled jobs.
“While AI’s impact on employment will be felt worldwide, India faces a heightened challenge due to its vast population and relatively low per capita income,” the report notes.
To mitigate this, the survey stresses the urgent need for workforce upskilling, urging a transition to medium- and high-skilled jobs where AI can assist rather than replace workers. “Managing this transition effectively is crucial—if not handled properly, prolonged unemployment could become a serious issue, making it difficult for workers to adapt to new market demands,” the report warns.
A potential decline in employment could also weaken consumer demand, posing broader economic risks. “If worst-case scenarios unfold, India’s growth trajectory could be severely disrupted,” the report cautions.
Reforms Needed to Drive Growth
The government underscores the necessity of regulatory reforms to accelerate economic expansion. Key areas requiring deregulation include land, labor, and factory laws, which have long been blamed for discouraging private investment.
“Without significant deregulation, other policy measures may fail to achieve the desired economic momentum,” says Chief Economic Advisor V. Anantha Nageswaran.
Despite global supply chains shifting away from China, foreign direct investment in India has been declining. Additionally, manufacturing has slowed, and corporate investment remains tepid.
A Possible Boost: Interest Rate Cuts
One potential positive development is the anticipated interest rate cut by the Reserve Bank of India—the first in over four years. Inflation dipped to 5.2% in December, remaining within the central bank’s 6% tolerance limit. However, food inflation remains stubbornly high at 8.39%, with vegetable prices soaring nearly 27%.
There is growing speculation that Finance Minister Nirmala Sitharaman might introduce a “feel-good” Budget, potentially including measures to stimulate spending—possibly even income tax cuts. Expectations surged after Prime Minister Modi, in a speech on Friday, referenced the goddess Lakshmi, seeking her “blessings” for the middle class and economically weaker sections.
India’s economic future remains uncertain, but decisive policy action and strategic investments in workforce development could help navigate the challenges ahead.
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