By Rajesh Mehta and Jayant Singhal
India’s economic momentum in 2025 continues to stand out globally. According to the IMF’s April 2025 World Economic Outlook, India is projected to grow at 6.2%, making it the fastest-growing major economy. In contrast, China is expected to grow at 4.6%, the U.S. at 2.3%, and the Eurozone at 0.9%. Among emerging markets, India leads peers like Vietnam (5.8%), Indonesia (5.1%), and Brazil (2.1%)—driven by resilient consumption, a scaling digital economy, and sustained public investment.
Yet as India’s macroeconomic fundamentals strengthen, a critical gap remains: its soft power ecosystem—spanning global mobility, currency credibility, innovation branding, and perception—remains underdeveloped. Ironically, even as India hosted a diplomatic delegation from Pakistan in a post-conflict gesture, most Indians still face restricted travel, limited IP recognition, and a currency with little global traction. Without structural reforms, such symbolism risks yielding little strategic value.
Passport Power: A Mobility Constraint
India’s passport ranks 85th on the Henley Passport Index 2025, offering visa-free or visa-on-arrival access to only 58 countries. That’s far behind Malaysia (183), Thailand (82), and Vietnam (51). This limited mobility restricts Indian professionals, students, and tourists, impacting everything from business travel to academic collaboration and cultural diplomacy. For a country positioning itself as a global talent hub, this creates real friction. Mobility diplomacy—focused on mutual visa waivers and professional corridors—must be made a strategic priority.
Rupee Internationalization: Progress and Potential
Despite India’s rising global stature, the Indian Rupee (INR) remains largely excluded from international transactions. The Reserve Bank of India has established Special Rupee Vostro Accounts (SRVAs) with 22 countries, holding $1.6bn, and expanded UPI’s international footprint to Singapore, France, the UAE, and Sri Lanka. But uptake remains narrow. Even in Southeast Asia, INR often must be converted via USD—incurring costs and signaling weak global trust. True currency internationalization will require gradual capital account liberalization, rupee-denominated bond markets, and deeper INR-based trade corridors.
Innovation: Scaling Up Recognition
India’s innovation trajectory shows promise but remains constrained. In 2024, India granted a record 101,311 patents (~277/day) and ranked 6th globally in filings with 64,480 applications, up 15.7% YoY. Domestic applicants accounted for 55.2%, reflecting growing indigenous innovation. Yet in 2025, patent grants fell to 3,520 and published applications to 9,101, hinting at a slowdown. GERD remains stuck at 0.64% of GDP, far behind China (2.56%), the U.S. (3.59%), and Israel (6.02%), with public institutions still leading spend. To unlock its potential, India must scale R&D investment, push IP commercialization, and globalize digital public goods like Aadhaar, UPI, and ONDC as exportable infrastructure.
Diaspora: An Underleveraged Asset
India’s diaspora—over 18.5mn strong—is the largest in the world. In 2024, it sent home a record $129.4bn in remittances, underlining both scale and attachment. Yet structured engagement remains largely ceremonial. India lacks a comprehensive diaspora strategy that converts this community into a long-term lever for capital, influence, and global branding. Establishing a Global Indian Strategic Council, diaspora innovation funds, and talent repatriation programs could meaningfully transform global Indian networks into soft power multipliers.
Investor Sentiment: A Cautionary Signal
Despite strong growth indicators, net FDI inflows plunged 96.5% in FY25, dropping to just $353mn from over $10bn the previous year. While gross FDI held steady at ~$81 bn, the spike in repatriations and outbound investments by Indian corporates has unsettled long-term investor confidence. Investors are not just reading growth forecasts—they’re assessing regulatory predictability, innovation quality, mobility friction, and global trust. These are all soft power inputs with hard capital consequences.
Strategic Imperatives to Bridge the Gap
India must act across five soft power levers to translate economic strength into sustained global relevance. First, deepen mobility diplomacy by securing at least 10 mutual visa-waiver agreements with ASEAN, GCC, and Latin America by 2026. Second, accelerate rupee internationalization by expanding trade corridors, issuing offshore INR bonds, and enabling UPI-based cross-border flows. Third, invest in innovation branding, showcasing India’s digital stack as a public-good export. Fourth, institutionalize diaspora strategy through global investment councils and policy platforms. Finally, embed perception infrastructure—tracking global mobility access, IP recognition, and currency trust—into national planning dashboards.
India’s economic ascent is no longer in question. What remains uncertain is whether it can parlay this scale into global credibility and leadership. While diplomacy with neighbors like Pakistan generates headlines, the real determinant of influence lies in how India’s passport, currency, technology, and people are experienced worldwide. It’s time to shift from symbolic gestures to strategic levers. We’ve earned the numbers. Now we must earn the narrative.
Views are personal.
Rajesh Mehta is a leading international affairs expert and Jayant Singhal is a researcher on geopolitics and trade