India's Economy Shows Resilience Amid Global Challenges

In the face of global geopolitical tensions and tariff policy uncertainties, India's economic activities demonstrated resilience during June and July, according to a recent bulletin from the Reserve Bank of India (RBI).

The RBI's July bulletin, particularly an article on the 'State of the Economy,' emphasized the fluidity of the global macroeconomic environment amidst ongoing geopolitical challenges. Despite these pressures, it noted that domestic economic activity in India has remained robust, driven by promising prospects in the kharif agricultural season and continued strength in the services sector, alongside modest industrial growth.

Headline retail inflation has stayed below 4% for five months, aided by food price deflation, while system liquidity has been in surplus. This surplus is crucial for the faster transmission of policy rate cuts to credit markets. Additionally, India's external sector remains stable, supported by substantial foreign exchange reserves and a moderate external debt-to-GDP ratio. The bulletin, however, clarified that the views are those of the article's authors and not the Reserve Bank of India.

(With inputs from agencies.)