India's Economic Resilience Amid Global Challenges
India's economic path remains robust despite global uncertainties, thanks to domestic strengths and evolving trade tactics. Experts note that while external challenges like tariffs and demand slowdowns pose risks, India's internal demand, service export strength, and adaptive trade policies continue to sustain its growth trajectory.
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Facing turbulent global economic waters, India's growth story continues to hold firm, bolstered by domestic resilience and an adaptive trade strategy, according to experts. Dharmakirti Joshi, Chief Economist at Crisil, explained to ANI that India's economic cycles are increasingly aligned with advanced economies due to elevated trade and capital flows.
"Short-term pains from the slowdown in advanced countries reach us," Joshi noted, particularly highlighting the impact of U.S. tariffs, which make Indian exports to the U.S. more costly. Beyond direct goods export issues, Joshi identified other challenges including decreased demand in major markets and excess capacity dumping from China.
Despite this, Joshi remains optimistic about domestic bolsters such as consistent monsoon seasons, manageable oil prices, ample forex reserves, and a robust services export domain, with nearly half of exports deriving from tariffs-unaffected services sectors.
India's GDP growth is projected at around 6.5%, supported by monetary policy easing and proactive government spending, said Joshi. Complementing this view, Deepa Kumar, Head of Asia-Pacific Country Risk at S&P Global Market Intelligence, underscored India's comparatively low trade dependency, which provides a buffer against global economic fluctuations.
Kumar emphasized India's strategic focus on deeper integration into the global economy, aiming for greater market access through free trade agreements. She remarked on the substantial potential in emerging markets across the Gulf, ASEAN, Latin America, and Africa, beyond India's current focus in the U.S. and EU.
India's service sector continues to provide a robust buffer against global trade changes, Kumar highlighted. The country's future trade agreements, like the India-UK FTA, are expected to cover both goods and services, boosting India's competitive edge, particularly through its young workforce.
Even as short-term risks from global uncertainties exist, India's domestic demand, service sector robustness, and prudent trade diversification strategies are seen as key propellers of sustained economic growth.
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