Indian Economy: Test of resilience for India

The Indian economy has demonstrated its resilience so far this fiscal, with the growth-inflation mix improving despite a challenging and uncertain global environment.

Growth for the fiscal is estimated at 7.4%, a positive surprise, attributable to three key factors: the lower-than-expected impact of the United States (US)-imposed tariffs; domestic monetary and fiscal stimulus; and sustained global growth driven by heavy investments in the artificial intelligence ecosystem, particularly in the US.

As the year progressed, the narrative shifted to optimism from concerns over a tariff-led downturn, not just for India but for several other economies as well, resulting in upgraded growth forecasts.