India is entering a fresh phase of global economic uncertainty with stronger domestic fundamentals, according to Chief Economic Adviser Dr V. Anantha Nageswaran. Speaking at ASSOCHAM’s Managing Committee Meeting and Special Session, Nageswaran said the economy has enough buffers to withstand renewed geopolitical tensions, elevated crude oil prices and tighter global financial conditions.
His assessment comes as crude oil prices have climbed beyond $107-$108 a barrel following renewed tensions in West Asia, while global bond yields have also hardened. Despite these pressures, Nageswaran said “the Indian economy is more likely to be resilient rather than becoming more vulnerable,” pointing to healthy bank credit growth, strong Goods and Services Tax (GST) collections and robust balance sheets across the corporate and banking sectors.
Nageswaran said the relative stability seen between March and July has given way to renewed volatility as geopolitical tensions have intensified and interest rates remain elevated across major economies.
The 10-year US Treasury yield has risen to 5.02 per cent, adding pressure to global financial markets. However, the CEA said India is approaching the latest bout of uncertainty from a considerably stronger position.
He stressed India’s recent sovereign rating upgrade to A-, along with the mobilisation of $137 billion through foreign exchange deposit swaps and external commercial borrowings. High-frequency indicators, including vehicle sales, e-way bill generation and export growth, also point towards continued economic activity, he said.
CEA Warns India Must ‘Raise Our Game’
Nageswaran said the current economic environment represents more than a temporary period of volatility and could mark a structural turning point for India. “This is a period of churn and this is an inflection point, and therefore what served us very well in the first 45 years since independence and then the next 30 years in the liberalisation era, both of these things may not necessarily be adequate for the next 25 years. We need to raise our game in multiple respects,” Dr Nageswaran said.
He said the changing economic landscape would require households and individuals to pay greater attention to their mental, physical and emotional wellbeing. He also urged young people to remain open to acquiring trade skills instead of limiting themselves to traditional educational routes, particularly as artificial intelligence begins to reshape employment.
