India is the fastest growing large economy today, surpassing the usual bulldozers, including China. The country's challenges, that have been a drag recently for its stock markets, are side effects of this growth, such as its hunger for oil at a time of rising global crude prices (although prices have fallen somewhat in the past week).
The country imports more than 80% of its oil requirements, and as the rupee fell among trade and deficit concerns, it has become abundantly clear that to sustain growth, India will need to grow stronger in managing its trade deficits and its current account debts. India's debt/gdp is over 68%, certainly not the worst in the world and below many advanced and emerging markets. China's debt is 247% of GDP, much higher and driven in large amount by private debt, presenting a challenge for the country as it battles rising trade tariffs from the US, and imposing counter-tariffs that could drive up costs. Nonetheless, a rising oil bill can raise government debt pretty quickly, and raise up inflation for Indian customers, forcing them to borrow more.
But the big, emerging challenge for India is in job growth, as it faces a challenge most large economies are already past - an extremely young population impatient for opportunity, and this has been linked by economists to rising religious and political tensions in the most populated states such as Uttar Pradesh. Unless successive governments decisively kickstart this in these states, particularly across the north, where joblessness has been an endemic problem, India will continue to face an extremely restless populace making contradictory demands on its governments, from reservations, to religious favoritism, to disproportionate giveaways. Farmer distress and recent tensions around job quotas have already been warning signs for a fast growing economy, that GDP growth rates are not enough.