India's Economy Set for World-Leading Growth, Adviser Says
DevinIndia poised for rapid growth, navigating global headwinds with low inflation and strategic self-reliance.
The Indian economy is demonstrating strong resilience and is expected to become the world's fastest-growing, supported by low inflation and sustained financial stability, according to a key adviser to Prime Minister Narendra Modi.
Speaking at a New Delhi event on Friday, Shaktikanta Das, who previously served as Governor of the Reserve Bank of India, affirmed this positive outlook while also acknowledging the significant challenges ahead.
Navigating Global Economic Headwinds
Das noted that India will continue to face external pressures. He highlighted several key global risks impacting the economic environment:
• Slowing Global Trade: A slowdown in the growth of international trade is creating a drag on export-oriented economies.
• Strained Multilateralism: The framework of global cooperation is under severe strain, complicating international policy and trade relations.
• Strategic Sector Rivalry: Critical industries, particularly semiconductors, are increasingly being used as tools of geopolitical influence.
These global issues are compounded by the pressure of US tariffs on India, which are among the highest in the region. In response, many investors are adjusting their portfolios to focus more on domestic-oriented sectors that are less exposed to external headwinds.
Low Inflation Creates Room for Policy Support
A core strength underpinning India's economic forecast is its manageable inflation. While the consumer price index in November rose from the previous month's all-time low, it remained comfortably below the Reserve Bank of India's 4% target.
This low-inflation environment provides the central bank with significant flexibility, leaving open the possibility of further interest rate cuts to stimulate economic activity if needed.
Balancing Self-Reliance with Global Rules
Das concluded by emphasizing India's strategic policy posture. He stated that the country remains a strong advocate for a rules-based global system. At the same time, India is actively embracing a policy of self-reliance to safeguard its strategic interests in an increasingly uncertain world.
