The COVID-19 pandemic brought unprecedented economic disruptions to India, affecting multiple sectors, employment, trade, and financial stability. The nationwide lockdown imposed in March 2020 resulted in a sharp contraction of GDP, declining by 7.3% in the fiscal year 2020-21. Businesses across industries, especially in manufacturing, tourism, and retail, faced severe downturns, leading to massive job losses, especially in the informal sector. Migrant workers were the most hit, and millions lost their jobs and were compelled to return to their home towns. The critical sectors like agriculture and health were resilient but supply chain halts and declining demand took its toll on the industrial production. In order to offset the economic hardship, the Indian government introduced several policy interventions, such as the Atmanirbhar Bharat stimulus package, monetary policy intervention by the Reserve Bank of India (RBI), and social protection programs for the poor and vulnerable. The crisis also facilitated digitalization, with companies and consumers embracing digital payments, e-commerce, and remote work applications at a speedy pace. Fintech and edtech spaces experienced unprecedented upsurge, while conventional business models experienced a paradigm shift. In spite of these efforts to recover, India has long-term challenges such as inflationary pressure, financial system vulnerabilities, and supply chain difficulties in the international economy. Enhanced public health infrastructure, innovation promotion, and structural economic reforms will be essential to long-term resilience. This paper analyzes the short-term economic consequences of COVID-19 in India, assesses government interventions, and discusses the recovery path with a focus on the role of digitalization, policy support, and sectoral adaptability to determine India's post-pandemic economic direction.