Resilient Growth Across Sectors Chief Economic Adviser V Anantha Nageswaran said on Aug 31 that India is reaping the benefits of structural reforms, with agriculture, manufacturing and services all contributing to economic growth. He praised the resilience of the economy, noting that manufacturing and services continued to perform well even as West Asia tensions threatened supply chains. The government’s proactive measures ensured that critical inputs remained available, keeping production lines running.
Exports & Trade Diversification External demand has remained supportive, with core and manufacturing exports recording healthy growth. The rise in manufacturing exports underscores the positive impact of free trade agreements (FTAs) and the government’s diversification efforts. The trade agreement with the European Union is expected to become operational by year‑end, and India must maintain cost competitiveness to capitalize on this new market.
Fiscal & Monetary Outlook Energy‑price risks have been muted by subdued global demand, especially from China, but potential supply disruptions could keep prices elevated. Higher diesel and natural‑gas prices could eventually weigh on private consumption. On the agricultural front, adequate rainfall and only marginally lower sowing rates have improved the outlook, though the rabi crop’s eventual impact will be monitored.
Inflation has risen from an unusually low base, with food prices moving higher, yet headline inflation remains well‑behaved and within the RBI’s target range. Wholesale inflation remains elevated, prompting the RBI to monitor second‑round effects before adjusting monetary policy. Fiscal risks have eased, as energy prices have not spiked sharply and GST collections have provided additional support. The RBI’s successful mobilisation of foreign‑currency non‑resident bank deposits has also helped bolster India’s foreign‑exchange reserves.
In summary, India’s economy shows resilience across sectors, a robust export sector, and a balanced fiscal position, while the RBI keeps a close eye on inflation and energy‑price dynamics to safeguard continued growth.