India’s Economic Strength Shines Amid Global Trade Turmoil
India is poised to weather global trade disruptions better than many peers, thanks to strong macro fundamentals and resilient domestic demand.
India’s Economic Shield in a Shifting Global Trade Landscape
As the world economy grapples with increasing uncertainty driven by shifting U.S. trade policies and rising protectionism, India stands out as a beacon of relative resilience. According to Shamika Ravi, a member of the Prime Minister’s Economic Advisory Council (EAC-PM), India is better positioned than many global economies to withstand the fallout of this new wave of trade turbulence.
Speaking to CNBC-TV18, Ravi explained that India’s strength lies in its sound macroeconomic foundation and the scale of its economy. “We are going to be the least affected,” she remarked, pointing to India’s domestic demand-led growth model as a vital buffer in contrast to China’s export-heavy, consumption-repressed economy.
Why India Is Less Vulnerable to Global Trade Shocks
At the heart of India’s economic armor is its large, diverse, and relatively self-sustaining domestic market. Unlike economies heavily reliant on exports, India’s internal consumption plays a dominant role in driving growth. This insular resilience becomes critical when countries like the United States adopt aggressive tariff strategies, which can rattle export-dependent nations.
While China’s economy has long leaned on exports, India’s late-industrializing trajectory means it hasn’t overly tied itself to volatile global trade winds. “This is just another episode we have to manage,” said Ravi, underscoring that tariffs are just one of many tools nations use in the evolving game of economic nationalism.
Protectionism Isn’t New—India’s Response Shouldn’t Be Reactive
Ravi highlighted that protectionist policies have been on the rise for over a decade—predating even the Trump administration. The growing inward turn of major global economies has become a fixture of international relations, not a passing phase. For India, the challenge is to craft a long-term, strategic response rather than react to each disruption individually.
India’s focus, she said, should be on innovation and enhancing global competitiveness, not leaning on tariffs or quick fixes. “Visible instruments like tariffs only offer momentary support,” Ravi warned, advocating instead for deeper structural reforms, including a pivot towards export subsidies and regulatory incentives to stimulate long-term growth.
Cooling Inflation, Stable Macros Signal Economic Confidence
On the domestic front, Ravi expressed confidence in India’s inflation outlook, crediting a fundamental shift in the country’s consumption pattern. As food costs take up a smaller share of household budgets, inflation has eased, giving the Reserve Bank of India potential room to cut interest rates.
“Inflation is down for all the right reasons,” she noted, suggesting that the reduced pressure on food prices reflects deeper economic changes. Lower inflation not only benefits households but also creates conditions for more affordable credit and investment, further reinforcing economic momentum.
Building Future-Ready Economic Policies Beyond Tariffs
Looking ahead, India’s strategy must evolve to keep pace with global shifts. Ravi pointed out that beyond shielding the economy from external shocks, India should cultivate a more robust industrial base through policy realignments that emphasize R&D, technology innovation, and productivity.
India’s electronics sector, for example, has shown remarkable growth despite facing tariff threats from the West. According to industry data, electronics exports have risen steadily, bolstered by incentives and a growing manufacturing ecosystem. This trend is emblematic of the kind of strategic realignment Ravi suggests—less reactionary, more visionary.
Conclusion: Strengthening India’s Economic Fortitude in a Fractured World
In an era where global trade is increasingly shaped by politics, tariffs, and nationalism, India’s measured, macro-stable path offers a lesson in resilience. Shamika Ravi’s perspective highlights not just India’s current strengths but also the importance of long-term strategic thinking in policy design.
As the world turns inward, India’s ability to look forward—investing in innovation, encouraging exports through smarter subsidies, and maintaining economic discipline—may very well define its rise as a global economic force. Rather than being swayed by short-term noise, the country’s future depends on staying the course with structural integrity and visionary policymaking.
Disclaimer:
This article is for informational purposes only and does not constitute financial or investment advice. The views expressed are based on public statements and analysis of current economic conditions. Readers should consult a qualified expert before making economic or policy-related decisions.
source : CNBCTV18