India’s growth story is hitting some bumpy roads from global turbulence, but experts say the country’s homegrown strengths and smart trade moves will help soften the blow. Economists point to steady domestic factors and a careful approach to international trade as key shields against the chaos.
In an exclusive chat with , Dharmakirti Joshi, Chief Economist at Crisil, explained how India’s economy is now more linked to advanced nations like the US and Europe. “Trade and capital flows have synced our growth cycles with theirs,” he said. Short-term slowdowns in those countries do ripple over here, especially with new US tariffs making Indian exports pricier. The US is our biggest trading partner, so this hits goods exports hard.
Joshi also flagged indirect hits, like weaker demand in other markets and cheap Chinese goods flooding in due to their overproduction. “Uncertainty is sky-high right now—worse than during the global financial crisis or the pandemic,” he warned. But don’t worry, India’s got buffers. A solid monsoon, falling oil prices, strong foreign exchange reserves, and a booming services sector are keeping things afloat. Services make up nearly half of our exports, and they’re tougher against tariff shocks.
“Domestic strengths are countering these global headwinds,” Joshi added. He predicts India will still clock about 6.5% GDP growth this year, thanks to the RBI’s interest rate cuts and the government’s early push on capital spending. That’s a big win for India’s economy amid global challenges.
Deepa Kumar, Head of Asia-Pacific Country Risk at S&P Global Market Intelligence, agrees that India stands out in Asia. “We’re less hooked on trade for growth compared to neighbors, which makes us more resilient to global shifts and changing trade policies,” she said. India’s trade strategy is evolving wisely, focusing on deeper ties in both manufacturing and services to tap new markets.
Right now, around 40% of our exports go to the US and EU, but Kumar sees massive opportunities in places like the Gulf, ASEAN, Latin America, and Africa. “India is pushing free trade agreements (FTAs) to open these doors,” she noted. The recent India-UK FTA talks show we’re bargaining hard on services too, which is a smart play since our services exports are a huge strength and here to stay.
Kumar also spotlighted India’s young workforce as a game-changer for competitiveness—if we skill them up for new jobs. Overall, while US tariffs, slowing global demand, and trade uncertainties could sting in the short term, India’s internal demand, services power, and gradual diversification will keep the growth engine humming. It’s all about balancing global risks with solid local foundations.
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