India's Economic Resilience: RBI Governor States US Tariffs Not a Major Concern for 8% Growth Trajectory

RBI Governor Sanjay Malhotra emphasized India's remarkable economic performance, citing growth projections exceeding 8% over the past year despite global economic uncertainties.

During his address at the International Monetary Fund's annual meeting on Wednesday, Governor Malhotra underscored India's nature as a predominantly domestic-driven economy, stating that while tariffs do have adverse effects, they "are not a matter of huge concern" for India's economic trajectory.

His comments specifically addressed the ongoing US tariff situation that has significantly disrupted global trade patterns and slowed growth across various economies worldwide.

"We are navigating through times of unprecedented uncertainties stemming from various factors including policy uncertainties. This creates significant challenges for emerging market economies' growth. It represents a risk that all emerging market economies must factor into their planning," Governor Malhotra explained.

Highlighting India's economic resilience, Malhotra noted: "India has demonstrated strong recovery from the COVID-19 pandemic and weathered the economic implications of the Russia-Ukraine conflict. We have effectively managed inflation, reducing it from 8% to 1.5%, the lowest level in 8 years. While inflation strength has remained somewhat elevated, it has substantially decreased from the 2022 peaks. Additionally, oil prices have moderated."

The RBI Governor further reported that India's fiscal deficit has reached a manageable level, projected at 4.4% of GDP for the Central government. He emphasized that India's total debt ranks among the lowest globally, attributing this achievement to effective coordination between the government and fiscal committee.

Addressing currency stability, Malhotra observed that despite the US dollar's 10% depreciation, the Indian rupee has maintained relative stability this year compared to other currencies. "This stability persists despite larger tariffs and capital outflows. Maintaining orderly movement of the rupee remains a priority for India," he stated.

Governor Malhotra concluded by highlighting the depth and robustness of India's capital markets, reinforcing the overall strength of the country's financial ecosystem.