India's Economic Resilience in the Face of Global Uncertainty

Despite the looming global geopolitical tensions and trade policy uncertainties, India's economy is on a steadfast path to achieve a 6.5% GDP growth in FY26, as stated by S Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM).

Domestic Tailwinds Supporting Growth

Dev highlights a combination of domestic factors fueling this optimistic outlook, including low inflation, a benign interest rate environment following RBI's consecutive rate cuts, and the anticipation of a favorable monsoon season.

Global Headwinds and Domestic Momentum

"The Indian economy is resilient and continues to be the fastest growing country among large economies," Dev remarked, acknowledging the challenges posed by global headwinds. However, robust domestic growth indicators for April and May suggest a strong underlying momentum.

Investment and Inflation Trends

With rising public capex, healthy consumption patterns, and improving rural demand, India's medium-term growth prospects appear robust. Recent disinflation trends, with CPI headline inflation at its lowest since January 2019, further bolster the growth cycle.

Private Capex and Future Prospects

Dev also pointed to green shoots in private capex, with corporate balance sheets in good shape and the banking sector profitable. He emphasized the need for India Inc to invest in new capacities, anticipating a boost from increasing domestic demand and reduced global uncertainties.